Palm oil closes highest in four-month tracking rival oils

Malaysian palm oil futures closed Monday at their highest level for more than four months, supported by the strength of rival oils on the Dalian and Chicago exchanges.

The benchmark?palm-oil contract for October delivery at the Bursa Derivatives exchange gained 47 ringgit or 1% to close at 4,724 Ringgit ($1,155.58), its highest closing rate since April 7.

A trader in Kuala Lumpur said that crude palm oil futures were 'holding firm' on the backs of Dalian vegetable oils and Southern Peninsular Palm Oil Millers Association (SPPOMA) data which showed signs of production slowdown. Malaysian palm oil stocks reached a five-month peak in July, reaching 2.63 million metric tons. This represents a 3.32% monthly increase, as production volumes increased faster than export demand. Data from the Malaysian Palm Oil Board were released on Monday. The data was within expectations. AmSpec Agri Malaysia reports that exports of Malaysian products containing palm oil rose by 14.8% between August 1-10, while Intertek Testing Services says they increased by 2.6%.

Dalian's palm oil contract grew by 0.59%, while the most active soyoil contract climbed 0.13%. Prices for soyoil on the Chicago Board of Trade rose 1.16%.

Palm 'oil monitors?price changes of rival edible oils as they compete to gain a share in the global vegetable oil market. The oil prices were barely changed on Monday as optimism about talks to reopen Strait of Hormuz tempered by Iran’s insistence that the United States must meet a number of demands before it can reopen.

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

(source: Reuters)