Palm oil gained on speculation that demand for the edible oil may remain strong in India and China, the world's biggest users.

May-delivery palm oil futures advanced 0.2 percent to 2,635 ringgit ($776) a metric ton on the Malaysia Derivatives Exchange.

"Demand growth should remain strong given the projected gross domestic product growth of around 8-10 percent for China and India," CIMB Group Sdn. said in a report today.

Palm oil also gained as soybeans, crushed to make soybean oil, advanced for a second day. May-delivery soybeans traded in Chicago advanced 0.2 percent to $9.71 a bushel at 6:49 p.m. in Singapore. May-delivery soybean oil was unchanged at 39.3 cents a pound at 6:46 p.m.

In China, September-delivery palm oil rose 1.2 percent to settle at 7,016 yuan ($1,028) a ton on the Dalian Commodity Exchange, extending yesterday's 2.3 percent jump. Soybeans rose 1.4 percent to 3,874 yuan, after climbing 1.1 percent yesterday.

Indonesia, the second-largest palm oil producer, may keep the export tax for March unchanged at 3 percent, Sahat Sinaga, second deputy chairman of the nation's palm oil board, said.

Palm oil, the cheapest cooking oil, is also used as an alternative fuel additive and tends to track crude oil prices. It surged 52 percent last year as crude oil jumped 78 percent.

Crude oil in New York for March delivery climbed to more than $80 a barrel for a third day in Asian trading and was last at $79.62 a barrel at 6:52 p.m. Singapore time.

Eoin Treacy's view Palm Oil bottomed in October 2008, successfully broke above MYR2000 in April 2009 and rallied to MYR2800. It has been consolidating this advance since, finding support at the psychological MYR2000 on two occasions and retested the May high last month. It found support in the region of the 200-day moving average a month ago and a sustained move back below MYR2400 would now be required to question potential for some additional upside.

Of potentially more interest, is palm oil's relationship to crude oil. For whatever reason, palm oil has led crude oil on at least three occasions in the last 2 years. It peaked in March 2008 versus oil's July peak. It bottomed in October 2008 versus oil's December nadir. Its rapid advance from April was capped in May while oil began to lose upward momentum from June. The present action is not at odds but palm oil's lead has been less reliable recently as crude oil has posted incremental new highs against the former's ranging.

Oil rallied sharply to $80 over the last few weeks and is a little overextended in the short term. A notable factor over the last few months has been the fact that oil has rallied from the lower side of the ranging uptrend much faster than it declines from the upper side, suggesting demand remains somewhat more vigorous. Provided it holds the progression of higher or equal reaction lows, the benefit of the doubt can continue to be given the relatively gradual upward bias.

Of the other oil bearing commodities, Sunflower seed, traded on the South African exchange, has a remarkable symmetry to its chart pattern. It found support above ZAR3,000 in early January and a sustained move below that area would be required to question potential for a further rally towards the upper side of the range. A sustained move above ZAR3500 would complete the developing base formation.