Palm oil rises for second straight session on crude strength

JAKARTA: Malaysian palm oil futures rose for a second straight session on Tuesday, following crude oil prices that continued to climb.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 46 ringgit, or 0.95%, at 4,896 ringgit ($1,200.59) a metric ton by the midday break.

“BMD CPO futures were seen trading higher today following gains in energy prices,” said Anilkumar Bagani, research head at the Mumbai-based vegetable oil broker Sunvin Group.

He added that additional support came from expectations of tightness next year due to Indonesia’s B50 biodiesel mandate and a potential production reduction due to El Niño.

Oil prices rose on Tuesday as concerns over supply disruptions persisted after attacks on Saudi Arabian energy infrastructure left the kingdom’s East-West pipeline offline and cast doubt on efforts to ease shipping risks in the Gulf.

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

Dalian’s most-active soyoil contract dropped 0.91%, while its palm oil contract shed 0.38%. Soyoil prices on the Chicago Board of Trade were slightly up 0.07%.

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

The ringgit, palm’s currency of trade, weakened 0.1% against the dollar, making the commodity cheaper for buyers holding foreign currencies. Palm oil may bounce further into the 4,930 ringgit to 4,964 ringgit per metric ton range, after breaking above a falling trendline, Reuters technical analyst Wang Tao said. ‑Reuters