JAKARTA: Malaysian palm oil futures extended gains for the fourth straight session on Monday, underpinned by worries over subdued production and tracking rival edible oils higher.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 71 ringgit, or 1.81%, to 3,987 ringgit ($845.96) per metric ton by the midday break.
“The futures were seen trading sharply higher today, following gains and bullish momentum in rival oils. Uptick in energy prices is also a reason behind the bullish momentum,” said Anilkumar Bagani, research head of Mumbai-based Sunvin Group.
Dalian’s most-active soyoil contract rose 0.97%, while its palm oil contract gained 2.72%. Soyoil prices on the Chicago Board of Trade were up 1.64%.
Exports of Malaysian palm oil products for June fell 11.8% to 1,306,689 tons from 1,481,916 tons shipped during May, cargo surveyor Intertek Testing Services said on Friday.
Indonesia has set its crude palm oil reference price for July at $800.75 per ton, up from $778.82 in June. The new reference price would put the export tax for CPO at $35 per ton and levy at $85.
Palm oil ends higher for second day on lower output concerns
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices climbed on Monday, supported by forecasts of a supply deficit stemming from peak summer fuel consumption and OPEC+ cuts in the third quarter, although global economic headwinds and rising non-OPEC+ output capped gains.
Higher crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil looks neutral in a range of 3,899-3,927 ringgit per metric ton, and an escape could suggest a direction, according to Reuters’ technical analyst Wang Tao.
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