Palm rises on short-covering, firmer palm olein, Chicago soyoil

Malaysian palm oil futures rose on Wednesday, extending gains from the previous session, as short-covering by traders and strength in Dalian palm olein and Chicago soyoil lent support.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained RM66, or 1.55 per cent, to RM4,330 (US$1,025.09) a metric ton at the midday break.

Strength in Dalian palm olein and Chicago soyoil markets spilled over into crude palm oil futures during the session, a Kuala Lumpur-based trader said.

“Dalian’s rally was driven by both short-covering and technical buying.”

Benchmark crude palm oil futures hit a midday high of RM4,334, with short-covering likely emerging after prices broke above the RM4,300-level, the trader added.

Dalian’s most-active soyoil contract added 0.3 per cent, while its palm oil contract rose 1.59 per cent. Soyoil prices on the Chicago Board of Trade gained 0.79 per cent.

Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Oil prices climbed in Asian trade after falling for three consecutive sessions as a US trade deal with Japan signalled progress on tariffs, though gains were capped by fading hopes for a breakthrough at an EU-China summit.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, strengthened 0.12 per cent against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.

European Union soybean imports for the 2025-26 season that began on July 1 reached 519,609 million metric tons by July 20, down 32 per cent year-on-year. Palm oil imports fell 53 per cent year-on-year to 93,234 million tons, according to data published by the European Commission.

Tags: Malaysia, palm oil, futures, benchmark contract, soyoil