KUALA LUMPUR: Malaysian palm oil futures firmed on Monday, lifted by higher soyoil and crude prices, but anticipation of rising supply kept the contract near a one-month low hit in the previous session.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange gained 15 ringgit, or 0.38%, to 3,930 ringgit ($876.25) a tonne by the midday break.
Palm slumped 6% last week after key buyer China imposed fresh COVID-19 lockdown measures in the cities of Chengdu and Shenzen to conduct mass testing, raising concerns over demand for the edible oil.
The contract opened higher following strong closing of soyoil prices last Friday.
Nevertheless, selling pressure were seen on expectations of higher production and inventories, a Kuala Lumpur-based trader said.
The Malaysian Palm Oil Board is scheduled to release August supply and demand data next week, with traders and analysts pegging inventories to swell above 2 million tonnes.
In related oils, Dalian’s most-active soyoil contract rose 1.7%, while its palm oil contract gained 0.3%.
Soyoil prices on the Chicago Board of Trade, which is closed for a public holiday, jumped 4% in the previous session.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices jumped more than $1 a barrel, extending gains as investors eyed possible moves by OPEC+ producers to tweak production and support prices at a meeting later in the day.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil may bounce to 4,000 ringgit, as it has found a support at 3,857 ringgit per tonne, Reuters technical analyst Wang Tao said.