SINGAPORE: Malaysian palm oil futures posted their sharpest increase in three weeks on Thursday, buoyed by strong export data and higher crude oil prices, although a stronger ringgit capped the gains.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange rose 85 ringgit, or 2.3% to 3,773 ringgit ($794.32) a metric ton at the midday break.
Exports of Malaysian palm oil products for October rose between 6.6% and 8.9% from a month earlier, cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia said on Tuesday.
Oil prices edged higher in early trade on Thursday as the conflict in the Middle East kept investors on edge about whether it could disrupt oil supplies around the region.
Stronger crude makes palm a more attractive option for biodiesel feedstock. Dalian’s most-active soyoil contract rose 1.6%, while its palm oil contract was up 2.2%.
Commodity brokerage StoneX on Wednesday lowered its forecast of the US 2023 soybean yield by 0.1 bpa from its Oct. 2 figure. The firm forecast US soybean production at 4.162 billion bushels, down from 4.175 billion previously.
Lower soybean production is expected to reduce supplies of soyoil, which competes with palm oil for market share.
Soyoil prices on the Chicago Board of Trade climbed 0.6% after hitting a five-month low in the previous session.
The Malaysian ringgit, palm’s currency of trade, strengthened 0.4% against the dollar to 4.754, and was set for its best day since July 31.
A stronger ringgit makes palm oil less attractive for foreign currency holders. Indonesia will continue its domestic market obligation (DMO) for palm oil into 2024 to maintain price stability of cooking oil, Trade Ministry official Isy Karim said on Thursday.
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