Palm oil climbs higher on rival crude oil, stronger than its competitors

Malaysian palm oil futures increased more than 2% on Monday, and were headed for their largest daily gain since March 30. Prices were supported by a stronger ringgit, Chicago soyoil as well as Dalian palm oil.

By midday, the benchmark contract for palm oil for August delivery at the Bursa Derivatives exchange had risen by 93 ringgit or 2.1% to $4,530 ringgit (1,139.62 USD) per metric ton, a rise for the second consecutive session.

Last week, the contract dropped 1.89% in its third consecutive weekly decline.

A Kuala Lumpur trader said that the strength in crude oil and gains in Chicago soyoil along with a weaker Ringgit had 'lifted' the market. He added that technical recovery from recent falls provided further support.

Oil prices continued to rise as the efforts to end the Iran war appeared to be stalled. This was after a nuclear plant in the United Arab Emirates was attacked and while U.S. president Donald Trump will likely discuss military options for Iran.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

Dalian's palm oil contract, which is the most active contract in Dalian, gained 1.26%. Chicago Board of Trade soyoil prices were up by 1.14%.

Palm 'oil monitors the price changes of competing edible oils as it competes to?take a share of the worldwide vegetable oils market.

Malaysia has reduced its crude palm oil price reference for June to a level which maintains export duties at 10%.

Data from AmSpec Agri Malaysia showed that Malaysian palm oils exports were expected to be down by 16.5% from the previous month.

The palm ringgit's trade currency has weakened by 0.71% compared to the dollar. This makes the commodity more affordable for buyers who hold foreign currencies. ($1 = 3.9750 ringgit)

(source: Reuters)