Palm oil rises on strong crude prices, Dalian strength

SINGAPORE: Malaysian palm oil futures gained at the close on Wednesday amid stronger crude oil prices and strength on the Dalian, though concerns over rising stockpiles capped gains.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 5 ringgit, or 0.1% to 3,684 ringgit ($772.49) a metric ton at closing.

Exports of Malaysian palm oil products for October rose between 6.6% and 8.9% from a month earlier, cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia said on Tuesday.

The rise in exports is being offset by expectations of higher output, according to analysts.

Currently, it is the peak season for palm oil production, but inventory levels are expected to come down next month, said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand and Co.

Palm oil eases, logs second monthly loss on rising stockpile forecast

Dalian’s most-active soyoil contract was up 0.5%, while its palm oil contract was up 0.1%.

A poll of seven analysts showed U.S. soybean crush likely increased in September to 5.249 million short tons, the largest September crush on record.

This increase is expected to boost supplies of soyoil, which competes with palm oil for market share.

Soyoil prices on the Chicago Board of Trade was unchanged.

Oil prices edged up in Asian trade on Wednesday ahead of key meetings of global central banks this week, including the U.S. Federal Reserve, while the market closely watched the latest developments in the Israel-Hamas conflict.

Stronger crude makes palm a more attractive option for biodiesel feedstock.

Some 200,000 hectares (494,210 acres) of oil palm plantations found in areas designated as forests in Indonesia are expected to be returned to the state to be converted back into forests, a government official said late on Tuesday.

The Malaysian ringgit, palm’s currency of trade, weakened 0.2% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.