VEGOILS - Palm prices rise ahead of Trump-Xi summit; stock market concerns increase.

Malaysian palm oil futures rose on Tuesday as the markets awaited the meeting between the US president and the Chinese president. However, traders expected stocks to rise amid subdued demand.

By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for December delivery had gained 21 ringgit or 0.43% to 4,878 Ringgit ($1,197.64).

Sandeep Singh, Director of Kuala 'Lumpur based consultancy and trading firm The Farm Trade, stated that the US President Donald Trump meeting with Chinese President Xi Jinping this week is 'providing support for the broader agricultural complexity, especially soyoil.

El Nino risks will continue to be a major concern through the middle of next season, he said.

He said that Malaysia's ending stock is expected to be more than 3 million tons and could possibly approach record highs. The demand was subdued, he added, while spot availability continued to affect prices.

Dalian's soyoil contract with the highest volume rose by 0.67% while palm oil contracts fell by 0.2%. Chicago Board of Trade soyoil prices climbed 0.13%.

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

Exports of palm oil-based products from Malaysia for the period September 1-20 fell between 12.8% and 24.7% compared to a month ago, according to cargo surveyors.

Oil prices rose for the first time in five sessions, as investors awaited news on possible US-Iran negotiations at the United Nations General Assembly next week.

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

The Malaysian Palm Oil Council stated that the price of crude palm oil is expected to stay 'above $1154 per metric tonne in October and throughout the rest the year. This will be due to weather uncertainty, as well as favorable energy markets.

(source: Reuters)