KUALA LUMPUR: Malaysian palm oil futures saw a second day of gains on Wednesday due to tight supplies and expectations of stronger export data.
Benchmark palm oil futures for November on the Bursa Malaysia Derivatives Exchange rose 0.9 percent to 2,600 ringgit ($644) per tonne at the end of the trading day. It had climbed to 2,623 ringgit, its highest since August 19.
Traded volumes stood at 38,035 lots of 25 tonnes each in the evening, below the 2015 average of 44,600.
"The market is steady because of short supplies," said a trader based in Kuala Lumpur.
"Coupled with good exports, the market is holding well. Data for tomorrow will be friendly," he added, referring to export numbers from cargo surveyors Intertek Testing Services and Societe Generale de Surveillance.
Traders expect Malaysian palm oil shipments between Aug. 1-25 to rise from the same time period last month, as demand from top consumers China and India grows.
Palm oil exports rose around 25 to 27 percent between Aug. 1-20 versus the same period in July, aided by stronger demand from India.
While output of the tropical oil is seen rising on-month on seasonal trend, it is recording lower year-on-year production as it remains affected by the lagged effects of the El Nino.
The dry weather event brings hot conditions across Southeast Asia, lowering palm yields in top producer Indonesia and in Malaysia.
Palm oil is expected to break price chart resistance at 2,607 ringgit per tonne and rise further to 2,668 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
In related vegetable oils, the Chicago Board of Trade soybean oil December contract gained 0.03 percent, while the January soybean oil contract on the Dalian Commodity Exchange rose 0.9 percent.