KUALA LUMPUR: Malaysian palm oil futures rose more than 2% on Thursday, tracking gains in related edible oils on China’s Dalian Commodity Exchange and on lower-than-expected palm production.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed 2.2% higher at 2,256 ringgit ($538.68) per tonne, posting its strongest daily gains in three months.

It rose as much as 2.6% to 2,265 ringgit earlier, the strongest level since Feb. 25.

Palm oil may test resistance at 2,243 ringgit per tonne, a break above which could lead to gains to 2,286 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals. “Palm is up on Dalian, but the market talk now is also that September production will not be so good, and August stocks might come down again,” said a Kuala Lumpur-based trader, referring to palm oil output and inventory levels in Malaysia, the world’s second-largest palm producer. Data released by a state millers association showed slowing output growth for the first 20 days of August versus the corresponding period last month, according to traders.

Malaysian palm oil inventories fell to a one-year low of 2.39 million tonnes in July, according to latest data from industry regulator Malaysian Palm Oil Board. Production rose 15.1% to 1.74 million tonnes, the highest monthly output this year.

US soyaoil futures on the Chicago Board of Trade were last up 0.2%.

Meanwhile, the September soyaoil contract on the Dalian exchange was up 0.6%, while the Dalian September palm oil contract rose 1.7%.—Reuters