Palm oil futures rise on stronger crude oil and soybean oil prices
Malaysian palm oil futures extended gains on Tuesday, supported by higher crude oil and soybean oil prices. During the midday session, the benchmark September contract on the Bursa Malaysia Derivatives exchange rose 0.9% to 4,574 ringgit/t (about $1,122/t).
The strongest gains were recorded in nearby contracts, which increased by 27–43 ringgit/t. The main driver was the sharp rise in crude oil prices following reports that the United States had reinstated a naval blockade on Iran, renewing concerns over shipping through the Strait of Hormuz.
Higher crude oil prices improved biodiesel margins and supported demand for vegetable oils. Soybean oil futures on the CME also strengthened, supported by crude oil gains and forecasts of hot, dry weather across parts of the U.S. Midwest that could threaten soybean yields.
Additional support came from the Chinese vegetable oil market, where both palm olein and soybean oil futures moved higher. The September palm olein contract on the Dalian Commodity Exchange gained 0.24%, while September soybean oil futures rose 0.20%, providing further support to Malaysian palm oil prices.
However, further gains were limited by the stronger Malaysian ringgit, which appreciated about 0.2% against the U.S. dollar. A stronger currency makes Malaysian palm oil more expensive for overseas buyers, reducing its competitiveness in the global market.
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