Palm oil closes at four-month high on Dalian, crude oil strength

JAKARTA: Malaysian palm oil futures rose for a second straight session on Tuesday, closing at their highest level in a little over four months as gains in rival edible oils on the Dalian exchange and in crude oil prices lent support to the market.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 24 ringgit, or 0.51%, at 4,747 ringgit ($1,160.64) a metric ton at the close.

Dalian’s most-active soyoil contract gained 0.14%, while its palm oil contract rose 0.47%. Soyoil prices on the Chicago Board of Trade were up 0.3%.

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

Crude oil prices rose more than 2% on Tuesday to their highest in over a week as hopes for a U.S.-Iran peace deal that would reopen the Strait of Hormuz faded after President Donald Trump demanded compensation from Tehran.

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

Malaysia’s palm oil stocks rose to 2.63 million metric tons in July, a five-month high and a 3.32% increase on a monthly basis, as production volumes expanded at a faster rate than export demand, data from the Malaysian Palm Oil Board showed on Monday.

Exports of Malaysian palm oil products for August 1-10 rose 9.21%, according to independent inspection company AmSpec Agri Malaysia, while Intertek Testing Services said they were up 2.6%.