Palm gains on soyoil strength at Dalian and Chicago
Malaysian palm oil futures extended gains on Monday, tracking strength in rival soyoil on Dalian and Chicago markets.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose 93 ringgit, or 2.12%, to 4,484 ringgit ($994.90) a metric ton by the midday break.
“Today’s market is tracking external performance of Dalian and Chicago soyoil,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract rose 2.44%, while its palm oil contract added 2.43%.
Soyoil prices on the Chicago Board of Trade were up 1.1%. Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
China’s soybean oil and meal futures logged their biggest daily rise since 2023 on Monday, while rapeseed meal and palm oil contracts also jumped, following a rally in the Chicago soy complex after the release of bullish USDA crop reports.
The US Department of Agriculture (USDA) last Friday projected lower-than-expected US soybean production and lowered its soy ending stocks due to a dry end to the growing season, sending Chicago soybean and soyoil prices to multi-month highs.
Malaysia’s palm oil stocks declined for a third straight month in December, falling 6.91% to 1.71 million metric tons, while crude palm oil production fell 8.3% and exports plunged 9.97%, data from the Malaysian Palm Oil Board showed on Friday.
Cargo surveyors estimated that Malaysian palm oil exports fell between 21.4% and 26.8% during the Jan. 1-10 period.
Oil prices extended gains for a third session on Monday, with Brent rising above $81 a barrel to its highest in more than four months, as wider US sanctions are expected to affect Russian crude exports to top buyers China and India.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The Malaysian ringgit, palm’s currency of trade, fell 0.31% against the US dollar, making the commodity cheaper for buyers holding foreign currencies.
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