Key Takeaways
- Malaysian palm oil futures rose 0.62% to $1,113.54 a metric ton.
- Support from stronger crude oil prices and Chicago soybean oil market contributed to the gains.
- Palm oil stocks reached a four-month high in June as production recovered faster than demand.
Malaysian palm oil futures saw an increase of 0.62% on Monday, reaching $1,113.54 per metric ton by midday, following the strength of rival soyoil and a rise in crude prices.
The benchmark palm oil contract for September delivery on Bursa Malaysia Derivatives Exchange was up 28 ringgit to 4,541 ringgit (approximately $1,113.54) per metric ton, reflecting the positive sentiment from higher crude oil and soyoil prices.
A Kuala Lumpur-based trader stated that support from stronger crude oil and Chicago soybean oil is expected to underpin market sentiment, indicating a continued upward trend in palm oil futures.
While Dalian’s most-active soyoil contract remained flat, its palm oil counterpart saw a 0.36% decline, suggesting a competitive yet interconnected relationship between the two markets.
Crude oil prices surged over 4% on Monday due to ongoing threats to energy shipments via the Strait of Hormuz and renewed military strikes by the U.S. and Iran, making palm oil more attractive for biodiesel feedstock.
The ringgit weakened 0.27% against the dollar, which made Malaysian palm oil cheaper for buyers holding foreign currencies, further boosting its appeal in international markets.
Data from the Malaysian Palm Oil Board revealed that stocks had climbed to a four-month high in June as production recovery outpaced demand, indicating a positive outlook for future supply and prices.
Cargo surveyors estimated an increase of 1.6% to 5.1% in exports of Malaysian palm oil products for July 1-10 compared to the previous month, reflecting steady international demand.
Indonesia’s energy ministry official stated that the country needs between 16.7 million and 18 million kilolitres of fatty acid methyl ester (FAME) for its newly launched B50 biodiesel program, highlighting the growing importance of palm oil in biofuel production.
Support from stronger crude oil and Chicago soybean oil is expected to underpin market sentiment.
A Kuala Lumpur-based trader, Trader
