Malaysian palm oil futures rose over 1% on Monday evening, hitting the highest in two months on the back of strength in related edible oils and a weaker ringgit. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange rose 1.5% to 2,093 ringgit ($501.08) per tonne at the close of trade.
It earlier rose by as much as 1.6% to 2,095 ringgit, matching the intraday highs reached on May 30. Palm oil may rise to 2,113 ringgit per tonne, as it has cleared a resistance range of 2,076-2,083 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals. Palm oil's gains were attributed to Friday's surge in US soyaoil futures on the Chicago Board of Trade, and current gains in related edible oils on China's Dalian Commodity Exchange.
US soyaoil futures on the CBOT gained nearly 2% on Friday, but were last down 0.7% as of 1050 GMT. The September soyaoil contract on the Dalian exchange rose 2.3% and the Dalian September palm oil contract gained 1.9%. Chicago soyabean futures lost ground on Monday, falling for four out of five sessions, as an escalating trade war between Washington and Beijing caused headwinds to the market.
Palm oil prices are affected by movements in related oils that compete in the global vegetable oils market. The ringgit, palm's currency of trade, eased 0.5% against the dollar to 4.1770 on Monday evening, its weakest levels in seven weeks. A weaker ringgit typically makes palm oil cheaper for holders of foreign currencies.
Meanwhile, a Reuters poll forecast that Malaysian palm oil stockpiles likely rose for the first time in five months, edging up to a three-month high, as production gains outpaced a rise in exports. Inventories are forecast to have gained 1.8% from the previous month to 2.47 million tonnes at end-July, while output would rise 11.4% to 1.69 million tonnes, its highest since January and the biggest monthly gain in 10 months. Exports were seen rising 3.8% from June to 1.44 million tonnes in July. Official data from the Malaysian Palm Oil Board is scheduled for release on August 13 after 0430 GMT.