KUALA LUMPUR: Malaysian palm oil futures rose on Wednesday, extending gains from the previous session, as short-covering by traders and strength in Dalian palm olein and Chicago soyoil lent support.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained 66ringgit, or 1.55%, to 4,330 ringgit ($1,025.09) a metric ton at the midday break.
Strength in Dalian palm olein and Chicago soyoil markets spilled over into crude palm oil futures during the session, a Kuala Lumpur-based trader said.
“Dalian’s rally was driven by both short-covering and technical buying.”
Benchmark crude palm oil futures hit a midday high of 4,334 ringgit, with short-covering likely emerging after prices broke above the 4,300-ringgit level, the trader added.
Dalian’s most-active soyoil contract added 0.3%, while its palm oil contract rose 1.59%. Soyoil prices on the Chicago Board of Trade gained 0.79%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices climbed in Asian trade after falling for three consecutive sessions as a U.S. trade deal with Japan signalled progress on tariffs, though gains were capped by fading hopes for a breakthrough at an EU-China summit.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.12% against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.
European Union soybean imports for the 2025-26 season that began on July 1 reached 519,609 million metric tons by July 20, down 32% year-on-year. Palm oil imports fell 53% year-on-year to 93,234 million tons, according to data published by the European Commission.
Palm oil may retest support at 4,198 ringgit per metric ton, a break below could open the way toward 4,150 ringgit, Reuters technical analyst Wang Tao said.