KUALA LUMPUR: Malaysian palm oil futures extended gains to the third straight session on Tuesday after a long holiday weekend, supported by stronger rival soyoils and a weak ringgit, but rising stocks limited gains.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange gained 81 ringgit, or 2.07%, to 3,893 ringgit ($901.16) a metric ton at closing.
“Soyoil’s premium over palm oil is increasing, exceeding $100 per ton for forward month shipments. This should drive higher demand during peak production months,” said a Mumbai-based trader, adding that rising soyoil prices will support palm oil.
The contract rose as much as 3.22% earlier in the session, its biggest daily gain since March 7, as the market in Malaysia reopened after the Vesak holiday on Monday.
However, palm futures eased after Malaysian Palm Oil Board data showed palm oil inventories jumped to their highest level in six months in April, as production surged to a decade-high for the month while local consumption dropped.
Palm oil exports by the world’s second-largest producer likely fell 9% in the May 1-10 period, according to cargo surveyor Intertek Testing Services.
Meanwhile, independent inspection company AmSpec Agri Malaysia estimated exports during the same period were up 0.6%.
Dalian’s most-active soyoil contract was up 0.08%, while its palm oil contract slid 0.03%. Soyoil prices on the Chicago Board of Trade (CBOT) were up 0.02%.
Palm oil tracks the prices of rival edible oils as it competes for a share of the global vegetable oils market.
The ringgit, palm’s currency of trade, weakened 0.61% against the U.S. dollar, making the commodity cheaper for buyers holding foreign currencies.
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