Palm rises nearly 2% on stronger Chicago soyoil, crude, export data

KUALA LUMPUR: Malaysian palm oil futures rose nearly 2% on Thursday, rebounding after two sessions of losses, as stronger Chicago soyoil, crude oil prices and robust export data supported the market.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed up 85 ringgit, or 1.89%, at 4,581 ringgit ($1,147.55) a metric ton.

Crude palm oil futures were seen trading sharply higher, tracking gains in Chicago soyoil and a rebound in energy prices, said Anilkumar Bagani, commodity research head at Sunvin Group, a Mumbai-based brokerage.

Support also came from a strong palm oil export outlook, with cargo surveyors estimating that exports for March 1-25 rose between 38.4% and 50.6% month-on-month.

The prospect of higher Indonesian palm oil export taxes in April also added to the gains, Bagani said.

Additionally, palm oil discount’s against gas oil once again expanded, increasing its appeal as a biofuel feedstock, he added.

Dalian’s most-active soyoil contract rose 1.05%, while its palm oil contract added 0.59%. Soyoil prices on the Chicago Board of Trade were up 0.7%.

Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Crude oil rose more than 3%, rebounding from the previous session’s losses, as prospects for a prolonged conflict in the Middle East stoked concerns over further supply disruptions.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Meanwhile, the ringgit, palm’s currency of trade, weakened 0.76% against the dollar, making the commodity cheaper for buyers holding foreign currencies.