Malaysian palm oil higher on stronger Chicago soyoil

Malaysian palm oil futures closed higher for a fifth consecutive session on Monday, supported by stronger Chicago soyoil and firmer crude oil prices.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 84 ringgit, or 1.96%, to close at 4,373 ringgit ($978.30) a metric ton. It has gained 2.36% in the last four sessions.

Crude palm oil (CPO) futures edged higher, riding on spillover gains from Chicago soyoil futures from last Friday and during Asian trading hours, said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin Group. US President Donald Trump’s import tariffs on Mexico, Canada and China had pushed up US soyoil prices, Bagani added. “A strong recovery in global energy prices and short-covering in CPO futures also contributed to the recovery (of CPO prices).”

Soyoil prices on the Chicago Board of Trade (CBOT) added 2.15%. The Dalian Commodity Exchange is closed from Jan. 28 to Feb. 4 for the Chinese Lunar New Year holidays.

Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market. Oil prices rose after Trump imposed tariffs on Canada, Mexico and China, raising fears of supply disruption, though gains were capped by concern over what could be an economically damaging trade war.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, weakened 0.45% against the US dollar, making the commodity cheaper for buyers holding foreign currencies.

Cargo surveyors estimated Malaysian palm oil exports in January to have fallen between 12.3% and 20.1%. Indonesia lowered its crude palm oil reference price for February to $955.44 a metric ton from January’s $1,059.54, a trade ministry official said.

Tags: soyoil, Malaysia, palm oil, futures, benchmark contract