Palm oil climbs to near one-month peak as crude, Dalian oils gain

JAKARTA: Malaysian palm oil futures rose on Monday to their highest level in nearly a month, supported by gains in crude oil prices, stronger Dalian vegetable oils and renewed El Niño concerns.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 45 ringgit, or 0.98%, at 4,642 ringgit ($1,134.96) a metric ton at close.

“BMD CPO futures opened gap higher following bullish rally in energy prices and in CBOT Soy oil futures,”  said Anilkumar Bagani, commodity research head at brokerage Sunvin Group, adding that “talks of a super strong El Nino have once again started gaining traction, helping palm oil prices move higher.”

Dalian’s most-active soyoil contract gained 0.58%, while its palm oil contract rose 1.56%. Soyoil prices on the Chicago Board of Trade increased 0.26%.

Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Brent oil prices rose 2% to more than $90 per barrel on Monday, as escalating U.S.-Iran hostilities in the Middle East restricted oil shipments through the Strait of Hormuz, before reversing early gains on comments from Iran’s foreign ministry saying negotiations with the U.S. could be pursued based on national interests.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Exports of Malaysian palm oil products for the July 1 – 20 period fell 0.9%, AmSpec Agri Malaysia said on Monday, while according to Intertek Testing Services, exports rose 4.1%.

Meanwhile, Malaysia is expected to see record high temperatures next year as El Niño strengthens, its meteorological department told Reuters, stoking worries about lower palm oil production.

The U.S. Climate Prediction Center says El Nino has strengthened over the past month and is forecast to intensify through 2026 and continue through early 2027.