Palm oil gains on rival Chicago soyoil, crude

JAKARTA: Malaysian palm oil futures rose on Monday, tracking stronger rival soyoil in the Chicago market, with a jump in crude prices also lending support. The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was up 28 ringgit, or 0. 62%, at 4, 541 ringgit ($1, 113. 54) a metric ton by the midday break. “Support from stronger crude oil and Chicago soybean oil is expected to underpin market sentiment, ” a Kuala Lumpur-based trader said. Dalian’s most-active soyoil contract traded flat, while its palm oil contract shed 0. 36%. Soyoil prices on the Chicago Board of Trade were up 1. 1%. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Oil prices surged over 4% on Monday as energy shipments via the Strait of Hormuz remained under threat, with the U. S. and Iran announcing renewed military strikes. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, weakened 0. 27% against the dollar, making the commodity cheaper for buyers holding foreign currencies. Data from the Malaysian Palm Oil Board showed that stocks climbed to a four-month high in June, with a recovery in production outpacing demand. Cargo surveyors estimated that exports of Malaysian palm oil products for July 1-10 rose between 1. 6% and 5. 1% from a month earlier. Indonesia needs 16. 7 million to 18 million kilolitres of fatty acid methyl ester, or FAME, for its newly launched B50 biodiesel, an energy ministry official said. Palm oil may test a support at 4, 477 ringgit per metric ton, a break below which could open the way toward 4, 441 ringgit, Reuters technical analyst Wang Tao said.

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