KUALA LUMPUR: Malaysian palm oil futures reversed early losses to end higher on Monday for a second consecutive session, driven by higher crude oil prices.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange ended the session up 1.05% at 4,345 ringgit ($1,015.66) a metric ton, after falling to as low as 4,247 ringgit earlier in the day.
The contract has gained 3.87% over the last two sessions. Firmer crude oil prices and the anticipation of the resumption of trading on the Dalian Commodity Exchange on Tuesday lifted Malaysian palm oil futures after the midday break, a Kuala Lumpur-based trader said. The Dalian’s vegetable oil markets were closed for China’s Golden Week holiday since Oct. 1.
Soyoil prices on the Chicago Board of Trade were down 0.09%. Chicago corn and soybean futures fell as a stronger dollar and expectations of good harvest weather, as well as record inventories in the US, provided headwinds to prices.
Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market. Oil prices extended gains, driven by fears of a wider Middle East conflict and potential disruption to exports from the major oil-producing region.
Brent crude futures rose 2.2% to $79.77 a barrel as of 1005 GMT. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 1.49% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
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