Palm oil prices rose on Monday

According to David Ng, a trader at Iceberg X in Kuala Lumpur, the price increase is driven by higher soybean oil prices and expectations of increased export volumes in the coming weeks. Ng forecasts palm oil prices to hold above 4,600 ringgit per tonne, with resistance at 4,750 ringgit per tonne. According to AmSpec, Malaysia’s palm oil exports from June 1-20 rose 20% to 862,436 tonnes.

Malaysian palm oil futures rose for the second straight session on Monday, closing at their highest level in nearly three weeks, supported by stronger Dalian and Chicago vegetable oil prices and a weaker ringgit, although gains were capped by oil weakness.

The benchmark FCPO3 palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange rose 25 ringgit, or 0.54%, to 4,671 ringgit (US$1,126.60) per metric tonne at the close.

The contract opened the trading session at 4,703 ringgit, its highest level since May 6, before declining.

“Palm rose on the back of a weaker ringgit and support from Chicago soybean oil, but gains were capped by weakness in oil prices,” a Kuala Lumpur-based trader said.

Soybean oil prices on the Chicago Mercantile Exchange rose 0.89%. The palm oil contract on the Dalian Commodity Exchange rose 0.45%, while the most actively traded soybean oil contract fell 0.07%.

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

The ringgit weakened 0.29% against the dollar, making the commodity more attractive to buyers holding foreign currency.

Malaysian palm oil exports for the period from June 1 to 20 increased 19.1% compared to the previous month, according to cargo inspection company Intertek Testing Services, while independent inspection company AmSpec Agri Malaysia said shipment volumes for the same period increased 20% month-on-month.

Brent crude oil prices fell by approximately 2% following the conclusion of US-Iranian talks in Switzerland, where Tehran announced it had received waivers for oil and petrochemical exports, easing concerns about supply shortages in global markets.

Lower crude oil futures prices make palm oil a less attractive option for biodiesel production.

Tags: palm oil, prices