Palm oil gains on rival Chicago soyoil, crude
- Dalian’s most-active soyoil contract traded flat, while its palm oil contract shed 0.36%
JAKARTA: Malaysian palm oil futures rose on Monday, tracking stronger rival soyoil in the Chicago market, with a jump in crude prices also lending support.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was up 28 ringgit, or 0.62%, at 4,541 ringgit ($1,113.54) a metric ton by the midday break.
“Support from stronger crude oil and Chicago soybean oil is expected to underpin market sentiment,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract traded flat, while its palm oil contract shed 0.36%. Soyoil prices on the Chicago Board of Trade were up 1.1%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Oil prices surged over 4% on Monday as energy shipments via the Strait of Hormuz remained under threat, with the U.S. and Iran announcing renewed military strikes.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.27% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Data from the Malaysian Palm Oil Board showed that stocks climbed to a four-month high in June, with a recovery in production outpacing demand.
Cargo surveyors estimated that exports of Malaysian palm oil products for July 1-10 rose between 1.6% and 5.1% from a month earlier.
Indonesia needs 16.7 million to 18 million kilolitres of fatty acid methyl ester, or FAME, for its newly launched B50 biodiesel, an energy ministry official said.
Palm oil may test a support at 4,477 ringgit per metric ton, a break below which could open the way toward 4,441 ringgit, Reuters technical analyst Wang Tao said.
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