Palm oil prices rise on the back of surging crude oil prices. El Nino concerns
Malaysian palm futures rose on Monday, following a rally in crude prices and strength?in Dalian vegetables oils. Renewed concerns about El Nino also helped to pull prices higher.
By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange was up 39 Ringgit (0.85%) at $4,636 ringgit (1,134.33 USD).
BMD CPO futures have opened higher after a?bullish rallies in energy prices, CBOT soy oil futures on Friday and in Chinese vegetable oil in Asian hours this morning. "Talks of a super-strong El Nino? have once again gained traction and are helping palm oil to move higher," Anilkumar bagani, commodity head at Sunvin Group, said.
Dalian's soyoil contract, which is the most active contract in Dalian, gained 0.51%. Its palm oil contract grew by 1.16%. Chicago Board of Trade soyoil prices increased by 0.06%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
Brent oil prices increased 2% on Monday to over $90 per barrel, as escalating 'U.S. - Iran hostilities' in the Middle East limited oil shipments via the Strait of Hormuz.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Malaysia's meteorological department has warned that El Nino is strengthening and will cause record temperatures in Malaysia next year. This could lead to lower palm oil production. The 'U.S. Climate Prediction Center reports that El Nino has intensified?over the last month and is expected to continue into early 2027.
Technical analyst Wang Tao stated that palm?oil could retest resistance at 4,613 Ringgit per metric tonne. A break above this level would lead to an increase to the high of 4,630 on July 9.
(source: Reuters)
