Palm oil is gaining to follow Chicago soyoils and crude oil higher

Malaysian palm oils futures climbed slightly higher on Tuesday after three sessions of losses. They mirrored the movement in crude oil, Chicago soyoil and other commodities, but concerns over high Malaysian stocks of palm oil capped gains.

At closing, the benchmark palm oil contract on Bursa Malaysia's Derivatives Exchange for June delivery gained 2 ringgit (0.05%) to 4,187 Ringgit ($932.72) per metric ton.

Early in the session the contract climbed as high as 2.27%, but palm oil "struggled" to remain upbeat due to weak fundamentals, a Kuala Lumpur based trader noted, citing the expectation of higher stock levels in March.

A survey on Friday showed that Malaysian palm oil inventories likely increased for the first six-month period in March, as production recovered. However, global demand is still sluggish due to tariff concerns.

Sri Mulyani said that Indonesia, which is the largest producer and exporter of palm oil in the world, would adjust its CPO tax to ease the burden placed on exporters by U.S. tariffs.

Palm oil prices rose in line with the rise of the energy markets and U.S. prices of soyoil - Brent futures LCOc1 gained 0.2% and Chicago Board of Trade soyoil price gains of 0.55%.

Palm oil becomes more attractive as a biodiesel feedstock when crude oil futures are stronger. Palm oil tracks the price movement of other edible oils in its competition for a piece of the global vegetable oil market.

Dalian's palm oil contract dropped 0.48%, while the most active soyoil contract declined 0.83%.

The palm ringgit's currency has been hovering near its lowest level in two months against U.S. dollars, making the commodity more affordable for buyers with foreign currencies.

A break above this level could result in a rise to the range of 4,323-4362 ringgit.

(source: Reuters)