JAKARTA: Malaysian palm oil futures ended higher on Monday as a stronger crude oil lent support after tracking down rival edible oils earlier in the session.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 8 ringgit, or 0.2%, to 4,070 ringgit ($962.17) a metric ton at closing.
“Crude trading higher, compared to Asia morning time, lifting Chicago soybean oil, thus Malaysian palm oil follow suit,” a Kuala Lumpur-based trader said.
Oil pared losses on Monday as a tight physical oil market offset the impact of OPEC+ hiking oil output more than expected in August as well as concern about the potential impact of US tariffs on economic growth and oil demand.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. Dalian’s most-active soyoil contract fell 0.93%, while its palm oil contract shed 0.31%. Soyoil prices on the Chicago Board of Trade lost 0.59%.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. The ringgit, palm’s currency of trade, weakened 0.28% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Palm oil may fall into the 4,008 ringgit to 4,032 ringgit per metric ton range, as a five-wave cycle from 3,947 ringgit has completed, Reuters technical analyst Wang Tao said.
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