KUALA LUMPUR: Malaysian palm oil futures surged over 1 percent on Monday, snapping a two-session slide, as gains from rival edible oils offset pressure from weaker crude prices.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 70 ringgit, or 1.56 percent, to 4,550 ringgit (USD1,114.65) a metric ton at the close.
Strong performance of rival markets, which advanced more than 1 percent too, provided positive support, said a Kuala Lumpur-based trader.
Dalian’s most-active soyoil contract rose 1.03 percent, while its palm oil contract added 1.06 percent. Soyoil prices on the Chicago Board of Trade were up 1.93 percent.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices fell after OPEC+ agreed to further increase its output targets from August while exports from key producers via the Strait of Hormuz are recovering, potentially adding to global supplies.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.37 percent against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Malaysia’s palm oil inventories likely rose in June to their highest level on record for the month, as stronger production outpaced demand growth, a Reuters survey showed.
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