Palmettos rebound on concerns about weather, but stronger Ringgit limits gains

Malaysian palm oil futures recovered from their early losses on Monday, supported by tensions and fears of weather-related disruptions. However, a stronger ringgit and concerns about demand capped the gains.

By midday, the benchmark contract for palm oil on Bursa Derivatives Exchange, which is due to be delivered in July, had risen 34 ringgit or 0.74% to 4,604 Ringgit ($1,164.69), a metric tonne. The contract had fallen as much as 0.4% earlier in the session.

Sandeep Singh, Director of The Farm?Trade in Kuala Lumpur, said that the Middle?East Conflict, as well as El Nino, and adverse weather conditions?that could disrupt production?, are supporting prices.

He said that a reduction in the use of biodiesel, or a lack thereof, poses a risk, and so does a decrease in demand. "The strengthening ringgit also weighs on prices," he added.

Exports of palm oil-based products from Malaysia for April were estimated to have fallen between 15.3% and 162% compared to a month ago.

The Chicago Board of Trade saw a rise of 0.07% in soyoil. Dalian Commodity Exchange will resume trading after a holiday on May 6.

Palm oil follows the price movement of competing edible oils as it competes to gain a share of global vegetable?oils.

The oil prices fell after Donald Trump announced that the United 'States will begin a?effort to assist ships stranded on the Strait of Hormuz. However, the absence of a U.S. - Iran peace?deal kept market support above $100.

Palm oil is less appealing as a biodiesel feedstock due to weaker crude oil futures.

The palm ringgit's currency has strengthened by 0.3% versus the dollar, making it more expensive for buyers who hold foreign currencies.

Statistics Bureau data show that Indonesia exported?5,85 million tons (or?5,85 million metric tons) of crude palm oil and palm oil refined in the first quarter of this year, an increase by 9.30% compared to a year ago.

(source: Reuters)