Palm climbs on stronger soyoil, crude oil prices

KUALA LUMPUR: Malaysian palm oil futures ended higher on Monday, snapping three consecutive sessions of losses, as stronger soyoil and crude oil prices supported the market.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange gained 11 ringgit, or 0.24%, to 4,516 ringgit ($1,152.04) a metric ton at the close.

The market traded higher on stronger soybean oil and crude oil prices during Asian hours, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.

“We see prices supported above 4,500 ringgit and resistance at 4,680 ringgit,” he said.

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

Dalian’s most-active soyoil contract rose 0.55%, while its palm oil contract edged down 0.11%. Soyoil prices on the Chicago Board of Trade were up 0.71%.

Oil prices rallied, a day after President Donald Trump said Iran’s response to a U.S. peace proposal was “unacceptable,” raising supply fears as the Strait of Hormuz stayed largely closed, which kept the global market tight.

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

Malaysia’s palm oil inventories rose in April for the first time in four months as exports fell amid a surge in production and higher imports, data from the Malaysian Palm Oil Board showed.

Cargo surveyor Intertek Testing Services estimated that exports of Malaysian palm oil products for May 1-10 rose 8.5% from a month earlier, while independent inspection company AmSpec Agri Malaysia estimated that exports declined 10.8%.

The ringgit, palm’s currency of trade, weakened 0.05% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.