The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives exchange was up 1.1% at 2,004 ringgit ($486.64) per tonne at the close of trade, after declining earlier on overnight losses in U.S. soyoil on the Chicago Board of Trade (CBOT).
KUALA LUMPUR: Malaysian palm oil futures recovered from earlier losses to rise over 1% on Tuesday, supported by strength in related edible oils and expectations that production gains will not be as high as forecast.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives exchange was up 1.1% at 2,004 ringgit ($486.64) per tonne at the close of trade, after declining earlier on overnight losses in U.S. soyoil on the Chicago Board of Trade (CBOT).
The market earlier rose as much as 1.3% to a one-month high of 2,008 ringgit.
"Related markets have all recovered," said a futures trader in Kuala Lumpur.
Another trader said the increase in Malaysia's July production was not as high as expected.
Malaysian palm oil production saw a monthly fall of 9.2% to 1.52 million tonnes in June, its lowest in nearly a year, according to data from the Malaysian Palm Oil Board.
Chicago soybean futures had closed lower on Monday, as hopes of Chinese buying fizzled out and forecasts of cooler weather in the U.S. Midwest eased concerns about crop yield losses.
Prices, however, recovered on Tuesday after a U.S. government report showed the country's crop condition lagging market expectations.
U.S. soyoil futures on the CBOT were up 0.7% as of 1130 GMT on Tuesday, having declined 1.2% on Monday.
In other related oils, the September soyoil contract on the Dalian exchange rose 0.7% and the Dalian September palm oil contract gained 1.1%.
Palm oil prices are affected by movements in related oils that compete for a share of the global vegetable oils market. - Reuters
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