SINGAPORE: Malaysian palm oil futures closed higher on Monday, after falling for the last seven consecutive trading days, but weaker rival soyoil capped gains.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange ended up 65 ringgit, or 1.9%, to 3,577 ringgit ($809.46) a tonne.
Palm oil attempted to recover some of the massive losses from last week, but there was little momentum to sustain the prices, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Palm recoups early losses, but set for biggest weekly drop in 4 months
“Sentiments are still bogged down by weakness in related vegetable oils,” he said.
Maybank Investment Banking Group reported that crude palm oil futures are in backwardation, as prices are expected to fall ahead of mid-year seasonal output recovery.
Exports of Malaysian palm oil products for March 1-25 rose between 11.4% and 19.8% from a month earlier, cargo surveyors said on Saturday.
Indonesia shipped 2.95 million tonnes of palm oil in January, up 35.2% from a year earlier, the Indonesian palm oil association said in a statement.
Crude palm oil output at the world’s biggest producer stood at 3.89 million tonnes in January, while inventories fell 3.56% from the month before to 3.09 million tonnes.
Dalian’s most-active soyoil contract rose 1.2%, while its palm oil contract climbed 2.0%. Soyoil prices on the Chicago Board of Trade were down 0.1%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices rose on Monday as investors assessed efforts by authorities to ease concerns over the global banking system, while Russian President Vladimir Putin’s plans to place tactical nuclear weapons in Belarus ratcheted up tensions in Europe.
Higher crude oil prices make palm a more attractive option for biodiesel feedstock.
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