KUALA LUMPUR: Malaysian palm oil futures rose as much as 4.6% to hit a near one-month high on Tuesday, boosted by demand optimism and a rally in rival oils ahead of a US Department of Agriculture (USDA) report that is pegged to show tighter global supplies.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange closed up 133 ringgit, or 3.87%, at 3,568 ringgit ($881.86) a tonne. Palm logged its sharpest daily climb in three months and closed at its highest level since Jan. 13.
Expectation of robust Feb. 1-10 exports and a rise in crude prices to pre-pandemic levels propelled the contract, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Focus is now on the next USDA report due later in the day, as well as Malaysian Palm Oil Board and cargo surveyor data due on Wednesday.
A Reuters poll of analysts expect the USDA to make further cuts to its end-of-season supply outlook for soyabeans and lower its harvest views for Brazilian and Argentine soya.
India’s edible oil consumption is expected to contract for a second straight year in 2020/21 as a rally in vegetable oil prices to multi-year highs curbs retail buying, industry officials told Reuters.
Dalian’s most-active soyaoil contract rose 3.2%, while palm oil contract gained 4%. Soyaoil prices on the Chicago Board of Trade were up 1.4%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices advanced to their highest in 13 months, as supply cuts by major producers and optimism over a recovery in fuel demand support energy markets.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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