Palm reverses losses due to higher crude oil prices
Malaysian palm futures recovered from early losses and ended higher for the second session in a row on Monday, due to higher crude oil price.
The benchmark palm-oil contract for December delivery at the Bursa Derivatives exchange ended the session with a gain of 1.05%, ending the day at 4,345 Ringgit ($1,015.66) per metric ton. Earlier in the morning it had fallen as low as 4,247 Ringgit.
The contract gained 3.87% in the last two sessions.
A Kuala Lumpur-based broker said that the firmer crude oil price and the expectation of the return of trading at the Dalian Commodity Exchange Tuesday afternoon lifted Malaysian palm oils futures following the midday break.
Since October 1, the Dalian vegetable oil market has been closed during China's Golden Week holidays.
The Chicago Board of Trade reported a 0.09% decline in soyoil.
Chicago corn and soybean prices fell due to a stronger dollar, expectations of good weather for harvest, and record inventories.
As rival edible oils compete to gain a share of global vegetable oil market, palm oil monitors the price movement of their competitors.
Fears of a larger Middle East conflict, and a potential disruption in exports from this major oil producing region, drove the price of oil higher.
Brent crude futures were up 2.2% at $79.77 per barrel by 1005 GMT. Palm oil is more attractive as a biodiesel feedstock due to the stronger crude oil futures.
The palm ringgit's trade currency has weakened by 1.49% compared to the dollar. This makes the commodity more affordable for buyers who hold foreign currencies. ($1 = 4.2780 ringgit)
(source: Reuters)
