Palm oil near one-month high

Malaysian palm oil futures rose to a near one-month high on Monday, tracking firm soyoil markets and as expectations of Ramadan-linked demand and rising crude prices supported. By the close, the benchmark September contract on the Bursa Malaysia Derivatives Exchange was up 1.7 percent, at 2,483 ringgit ($770) per tonne. Earlier, prices touched 2,488 ringgit, their highest level since May 29.
"Everything is good," said a Kuala Lumpur-based trader with a foreign commodities brokerage. "You have strong crude prices and we're moving into the fasting season next week," he said referring to the start of the holy month of Ramazan. "We should maintain these levels," he added. Total traded volume stood at 28,211 lots of 25 tonnes, slightly lower than the average 35,000 lots.
Brent crude was up at around $115 a barrel, supported by worries about potential disruptions to supply from Iraq, where Sunni insurgents took control of strongholds along the border with Syria at the weekend. Militants from the Islamic State of Iraq and the Levant seized three towns in Iraq's western Anbar province after taking control of two frontier crossings on the Iraq-Syrian border at the weekend. Higher crude prices can make palm oil a cheaper option for biodiesel feedstock.
"The spread between palm and crude is widening so that is supportive of palm," said a Jakarta-based palm trader, who was also paying close attention to reports of dry weather, and a possible link to a potential El Nino weather pattern. "So far, CBOT is steady too." In competing vegetable oil markets, the US soyoil contract was up 1.4 percent in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange added 2.1 percent. Palm typically tracks soyoil, a common fuel and food substitute. Benchmark palm prices eased on Friday, as poor export data weighed despite expectations of an uptick in demand due to the start of Ramadan, which typically drives up consumption of the vegetable oil. In other data, cargo surveyors Intertek Testing Services and Societe Generale de Surveillance release Malaysia's June 1-25 palm oil export data on June 25.