SINGAPORE: Malaysian palm oil futures closed higher on Monday, tracking gains in rival soyoil prices, although concerns around key producer Malaysia’s exports weighed.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 19 ringgit, or 0.49%, at 3,863 ringgit ($815.50) a metric ton at closing.
Dalian’s most-active soyoil contract rose 0.76%, while its palm oil contract gained 0.24%. Soyoil prices on the Chicago Board of Trade climbed 0.93%.
The outlook for the soybean harvest in Rio Grande do Sul has deteriorated swiftly after torrential rain flooded fields. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil futures climbed after Saudi Arabia hiked June crude prices for most regions and as the prospect of a Gaza ceasefire deal appeared slim, renewing fears the Israel-Hamas conflict could still widen in the key oil producing region.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
“Palm oil was seen trading in a tight range today as the Chinese markets reopened after Labour Day holidays,” said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin Group.
Although a weaker ringgit against the dollar supports the market, Malaysia’s palm oil exports from May 1 to 5 is expected to be sharply down, adding weight to palm prices, Bagani added. The Malaysian ringgit, palm’s currency of trade, hit an intraday low of 4.74, weakening 0.04% against the dollar.
Malaysia’s exports of palm oil products in April were estimated to have declined 7.79% month-on-month amid stiff price competition from other edible oils, a Reuters survey showed on Friday.
Palm oil may rise this week towards the resistance levels of RM3,930-3,950 per ton this week, with support at RM3,680-3,700 per ton, LSEG said in a research report published on Monday.
Comments
Comments are closed for this article.