Palm oil prices ended Monday’s trading higher
Palm oil prices closed higher, following higher crude oil prices amid escalating tensions in the Middle East, said David Ng, a Kuala Lumpur-based trader at Iceberg X. Ng sees support at 4,450 ringgit per tonne and resistance at 4,580 ringgit per tonne.
Malaysian palm oil futures closed higher on Monday, following higher crude oil prices, while additional support came from rising prices of competing edible oils in the Dalian and Chicago markets.
The benchmark FCPO1 palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange rose 47 ringgit, or 1.06%, to close at 4,497 ringgit (US$1,138.19) per metric tonne.
“Futures are trading slightly higher, largely due to rising crude oil prices, as renewed tensions in the Middle East have once again reduced shipping activity in and out of the Persian Gulf, helping prices partially recoup last Friday’s sharp decline,” said Kang Wei Cheang, an analyst at StoneX in Singapore.
Meanwhile, Dalian markets recovered from Friday’s losses, further supporting sentiment, while the Chicago soybean oil market is mixed, with soybean oil recovering thanks to the oil-to-cake spread and higher oil prices, he added. Oil prices jumped more than 6% in early trading on Monday amid concerns that a ceasefire between the US and Iran could collapse following the US seizure of an Iranian cargo ship and the near-collapse of traffic through the Strait of Hormuz.
Strengthening oil futures makes palm oil a more attractive biodiesel feedstock option. The most-active Dalian soybean oil contract rose 0.17%, while the CPO1 palm oil contract added 0.39%. Soybean oil prices on the Chicago Mercantile Exchange rose 1.24%.
Palm oil prices are tracking the price movements of competing edible oils as it competes for share in the global vegetable oil market.
According to independent inspection company AmSpec Agri Malaysia, Malaysian palm oil exports fell by 25.6% from April 1 to 20 compared to March 1 to 20, while Intertek Testing Services, a cargo inspection company, reported a 25.8% decline.
The ringgit weakened by 0.03% against the dollar, making this commodity slightly cheaper for buyers with foreign currency.
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