Palm surges due to stronger soyoils and weaker ringgit
After a long weekend of holidays, palm oil futures in Malaysia extended gains for the third consecutive session on Tuesday. Supported by stronger soyoils, a weaker ringgit and stronger rivals, rising stocks, however, limited gains.
The benchmark contract for palm oil delivery in July on the Bursa Derivatives exchange gained 81 Ringgit or 2.07% to close at 3,893 Ringgit ($901.16) per metric ton.
"The premium of soyoil over palm oil has increased, and now exceeds $100 per ton in forward-month shipments. This should lead to higher demand in the peak production months," said Mumbai-based trader. He added that increasing soyoil will support palm oils.
The contract gained as much as 3.2% in the first session. This was its largest daily gain since the 7th of March, when the Malaysian market reopened on Monday after Vesak.
The price of palm futures fell after data from the Malaysian Palm Oil Board showed that palm oil inventories rose to their highest levels in six months during April. Production surged to an all-time high for the month, while local consumption declined.
Intertek Testing Services, a cargo surveyor, estimates that palm oil exports from the second largest producer in the world fell by 9% between May 1 and 10.
AmSpec Agri Malaysia, an independent inspection company, estimated that exports for the same period increased by 0.6%.
Dalian's palm oil contract, which is the most active contract in Dalian, fell 0.03%. Chicago Board of Trade Soyoil Prices were Up 0.02%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the prices for rival edible oils.
The palm ringgit's currency has weakened by 0.61% compared to the U.S. Dollar, lowering the price of the commodity for foreign buyers.
(source: Reuters)
