KUALA LUMPUR: Malaysian palm oil futures surged on Wednesday for a second straight session, hitting a two-week high, tracking a rally in rival edible oils underpinned by concerns over dry weather conditions.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 107 ringgit, or 3.13%, to 3,523 ringgit ($763.05) a metric ton by the midday break, its highest since May 30.
The US Environmental Protection Agency (EPA) is expected to release a final rule on biofuel blending volume mandates for the years 2023-2025 by June 21, after seeking a one-week extension on a deadline for the rule, according to a court document on Tuesday.
“The EPA announcement and dry conditions in the US Midwest are keeping the market nervous, and many would rather cover their short positions before a major deterioration of crops,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Soyoil prices on the Chicago Board of Trade firmed after a 2.8% overnight jump on concerns over crop conditions amid dry weather in the US Midwest.
Dalian’s most-active soyoil contract gained 2.1%, while its palm oil contract rose 3.4%.
Palm oil rises to two-week closing high on stronger crude, soyoil
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
There’s also a slowdown in Malaysia’s June production due to hot and dry weather conditions, Paramalingam added. Cargo surveyors are scheduled to release June 1-15 shipment data from Malaysia on Thursday.
Exports during June 1-10 had declined between 16.7% and 17.6%, according to Intertek Testing Services and Amspec Agri data published earlier this week.
Meanwhile, President Vladimir Putin said on Tuesday that Russia was considering withdrawing from the Black Sea grain deal because the West had cheated Moscow by implementing none of the promises to get Russian agricultural goods to world markets.
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