JAKARTA: Malaysian palm oil futures surged on Tuesday, extending a rebound from more than a one-month low, as stronger rival vegetable oils and crude oil lent support, while market participants awaited Malaysian palm oil output data.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange gained 151 ringgit, or 3.92%, to close at 4,006 ringgit ($875.63) per tonne.
“Technical rebound is due to oversold and as external markets mostly higher,” a Kuala Lumpur-based trader said, adding that market participants are waiting for Malaysia’s Nov. 1-20 palm oil production figure.
The contract a day earlier hit its lowest level since Oct.
17 after posting a 10% weekly fall last week.
The news about Indonesia’s higher biodiesel blending trials, known as B40 road test, going well is also supporting palm prices, said Anilkumar Bagani, commodity research head at Sunvin Group.
The technical report on the trial is expected to be completed next month, according to a statement from Indonesia’s energy ministry.
Exports of Malaysian palm oil products in the Nov. 1-20 period are seen rising between 2.9% and 9.6% according to reports from cargo surveyor Societe Generale de Surveillance, Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.
Dalian’s most-active soyoil contract fell 0.53%, while its palm oil contract rose 1.35%. Soyoil prices on the Chicago Board of Trade were up 0.92%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil rose on Tuesday after top exporter Saudi Arabia said OPEC+ was sticking with output cuts and could take further steps to balance the market, which also supported palm oil prices, as higher crude prices make it more competitive to use palm oil for biodiesel.