KUALA LUMPUR: Malaysian palm oil futures advanced for a fifth consecutive session on Monday amid concerns over dry weather taking a toll on global production of palm and soybeans.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 15 ringgit, or 0.4%, to 3,758 ringgit ($817.91) per metric ton, its highest since May 9.
The market seems to be steady with expectations of some yield losses in Malaysia due to hot and dry weather, said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.
But Indonesia has been putting pressure on the market by selling cheaper palm olein as production has increased, and it is now looking to capture more market share, he added.
Palm oil rallies over 6% on concerns over hot, dry weather
Signs of worsening drought in the U.S. Midwest have also heightened concerns over soybean crops, pushing Chicago soybean futures to hit their highest in nearly six weeks on Friday.
The soyoil market on the Chicago Board of Trade was closed on Monday for a public holiday.
Dalian’s most-active soyoil contract rose 2%, while its palm oil contract gained 2.5%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Refinitiv Agriculture Research said in a note that the contract might extend the rally towards the resistance levels of 3,830-3,850 ringgit per metric ton this week, with support at 3,680-3,700 ringgit per metric ton.
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