KUALA LUMPUR: Malaysian palm oil futures rose for a third straight session on Monday, supported by higher crude prices, although tepid performance from rival Chicago soyoil last week weighed on the market.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained 12 ringgit, or 0.35%, to 3,428 ringgit ($737.84) a tonne.
The contract plunged 17.6% in September, marking its fifth straight monthly loss.
Palm oil futures turned stagnant ahead of industry estimates for September supply-and-demand as well as production data, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Top producer Indonesia has set its crude palm oil reference price at $792.19 per tonne for the period of Oct. 1-15, a trade ministry regulation document released on Friday showed, placing the export tax for the vegetable oil at $33 per tonne.
Oil prices jumped more than 4% as OPEC+ considers cutting output by more than 1 million barrels a day for its biggest reduction since the pandemic, in a bid to support the market.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The Dalian Commodity Exchange is closed this week for holidays.Soyoil prices on the Chicago Board of Trade were up 0.7%, after declining 3.5% in the previous session.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Worries over interest rate hikes may lead to the palm oil contract hitting sharp lows, but consumers may be willing to lock in long-term purchases at current current price levels and that will cap losses, said Sandeep Singh, director of The Farm Trade, a Kuala Lumpur-based consulting and trading firm.