SINGAPORE: Malaysian palm oil futures edged higher on Monday, supported by firmer crude and rival oils, although prospects of higher supply from top producers capped gains.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained 45 ringgit, or 1%, to 4,486 ringgit ($1,071.41) a tonne during early trade.
"Prices rose due to higher crude and rival oils," a Kuala Lumpur-based trader told Reuters.
Oil prices rose for a fifth straight day on Monday with Brent heading for $80 amid supply concerns as parts of the world sees demand pick up with the easing of pandemic conditions.
Higher crude oil prices make palm oil a more attractive feedstock for biodiesel.
Palm oil extends gains on rival oil strength
Rival soybean and palm oil contracts on the Dalian Stock Exchange both rose 0.7% on Monday. Soybean oil on the Chicago Board of Trade, was last down 0.1%, after rising 1.5% in the previous session.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Further gains, however, were capped by expectations of higher output. Leading industry analyst Dorab Mistry said on Saturday that palm prices will start to ease from March on rising output from Indonesia and Malaysia.
Fundamentals
Asian shares got off to a cautious start on Monday as a jump in oil prices to three-year highs could inflame inflation fears and aggravate the recent hawkish turn by some major central banks.
Palm oil may revisit its Aug. 12 high of 4,560 ringgit per tonne, as it has broken a resistance at 4,435 ringgit.
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