Palm oil futures rise on output concerns
Malaysian palm oil futures extended gains for the fourth consecutive session on Monday, driven by strength in rival edible oils. The benchmark December contract rose 30 ringgit to 3,977 ringgit per metric ton, after briefly reaching 4,040 ringgit. However, gains were limited by news of Indian refiners cancelling 100,000 metric tons of palm oil purchases.
KUALA LUMPUR: Malaysian palm oil futures extended gains on Monday for a fourth straight session, tracking strength in rival edible oils, but output concerns amid poor weather conditions in the world’s second-biggest producer capped the rise.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained 30 ringgit, or 0.76%, to 3,977 ringgit ($946.90) a metric ton by the midday break. The contract traded as high as 4,040 ringgit a ton earlier in the session before paring back the gains following news that Indian refiners cancelled 100,000 metric tons of palm oil purchases for delivery between October and December.
The palm oil market is continuing an upward trajectory in line with the strength of rival edible oils, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
However, the unfavourable weather conditions in northern peninsular Malaysia coupled with the heatwave in South America are keeping the market vulnerable, he said.
Last Friday, Malaysia’s meteorological department said the monsoon season is expected to begin on Tuesday and will last until early November. Storms and a high risk of flooding during the year-end monsoon season are likely to disrupt harvesting activities and hurt production in the world’s second-largest palm producer.
Dalian’s most-active soyoil contract rose 0.23%, while its palm oil contract added 0.93%. Soyoil prices on the Chicago Board of Trade were up 1.02%. Palm oil tracks the price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
Oil prices rose slightly on Monday after last week’s cut to US interest rates and a dip in US crude supply in the aftermath of Hurricane Francine countered weaker demand from top oil importer China.
Brent crude futures for November were up 0.2% at $74.64 a barrel at 1002 GMT. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, was unchanged against the dollar. A firmer ringgit makes the commodity more expensive for buyers holding foreign currencies and caps its gains.
Source Link : https://www.brecorder.com/news/40323636/palm-oil-futures-rise-on-output-concerns
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