Palm oil futures closed higher on Monday

Kenanga Futures analysts noted in their note that prices likely followed overnight increases in competing vegetable oils. Continued delays in opening the Strait of Hormuz due to the Middle East conflict could also support prices, according to Kenanga Futures analysts. They pegged support and resistance levels for the August futures contract at 4,400 and 4,520 ringgit, respectively.

Malaysian palm oil futures rose more than 2% on Monday, posting their largest daily gain since March 30. The rise was driven by higher prices for Dalian vegetable oils, Chicago soybean oil, and crude oil, as well as a weaker ringgit.

The benchmark FCPO1 palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange rose 96 ringgit, or 2.16%, to close at 4,533 ringgit (US$1,140.66) per metric tonne, marking a second consecutive session of gains.

Last week, the contract fell 1.89%, marking its third consecutive weekly decline.

A Kuala Lumpur-based trader said rising oil prices, strong gains in Chicago soybean oil prices, and a weaker ringgit contributed to the market’s rally, adding that a technical rebound from recent declines provided additional support.

Oil prices continued to rise on Monday, fueled by the increasingly gloomy outlook for peace in the Middle East following the attack on a nuclear power plant in the United Arab Emirates.

Strengthening oil futures makes palm oil a more attractive biodiesel feedstock option.

The most active Dalian soybean oil contract was little changed, up 0.08%, while the CPO1 palm oil contract rose 1.55%. Soybean oil prices on the Chicago Mercantile Exchange rose 1.4%.

Palm oil is tracking the price movements of competing edible oils as it fights for share in the global vegetable oil market.

Malaysia lowered its June palm oil benchmark price to a level that maintains the export duty at 10%.

According to inspection company AmSpec Agri Malaysia, Malaysia’s palm oil exports from May 1-15 are expected to decline 16.5% compared to the previous month.

The ringgit weakened 0.68% against the dollar, making the commodity cheaper for buyers holding foreign currency.

Tags: prices, palm oil