Palm climbs to over one-week high on strong rival oils, crude

KUALA LUMPUR: Malaysian palm oil futures rose more than 1% to climb to an 11-day high on Tuesday, as stronger rival edible oils and crude oil prices supported the market.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained 66 ringgit, or 1.43%, to 4,695 ringgit ($1,146.80) a metric ton, the highest closing since July 24. The contract fell 1.15% in the last two sessions.

Crude palm oil futures were supported by firmer rival oilseed markets and a recovery in crude oil prices, a Kuala Lumpur-based trader said.

“The combination of these external factors helped lift market sentiment,” the trader added.

Dalian’s most-active soyoil contract rose 0.32%, while its palm oil contract added 0.23%. Soyoil prices on the Chicago Board of Trade were up 0.56%.

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

Oil prices rose more than 2% as a diplomatic resolution to the U.S.-Iran conflict remained uncertain, while disruptions to oil flows through key shipping routes persisted.

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

The ringgit, palm’s currency of trade, weakened 0.02% against the U.S dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

Malaysia’s palm oil inventories are expected to have risen to a five-month high in July, as production growth outpaced robust demand, a Reuters survey showed.

Indonesia exported 11.28 million metric tons of crude and refined palm oil in the January to June period, up 2.5% from the same period a year earlier, statistics bureau data showed.