KUALA LUMPUR: Malaysian palm oil futures extended gains on Thursday to a sixth session, buoyed by concerns over wet weather hitting production and tracking a rally in Chicago soyoil and crude oil prices.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained 93 ringgit, or 2.55%, to 3,735 ringgit ($807.04) a tonne by the midday break. Earlier in the session, it rose as much as 4.4%.
Palm oil prices are likely driven by demand and discounts to soft oils, said Marcello Cultrera, director at commodities consultancy Apricus 8 Pte Ltd in Kuala Lumpur.
Expectations of a drop in Southeast Asian palm oil production from November to February due to potential La Nina weather disruptions also supported the contract, he said.
Oil prices rose for a fourth straight session, with Brent at a three-week high, after OPEC+ agreed to further tighten global crude supply with a deal to slash production by about 2 million barrel per day, the largest reduction since 2020.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. Soyoil prices on the Chicago Board of Trade rose 0.2%, stretching gains to a fourth day.
Palm oil may extend gains into 3,824-3,919 ringgit range
The Dalian exchange was closed for the week for holidays.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil still targets a range of 3,824-3,919 ringgit per tonne, as the uptrend from 3,220 ringgit consists of five waves, Reuters technical analyst Wang Tao said.