Malaysian palm oil futures jumped on Tuesday after two straight sessions of falls, as gains in rival Dalian and Chicago oils and an improving export outlook underpinned the market.
The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange gained 76 ringgit, or 1.96%, to 3,946 ringgit ($841.54) per metric ton by the midday break.
Malaysian palm oil futures were seen trading sharply higher, following bullish momentum in Dalian contracts and Chicago Board of Trade soyoil futures, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
“The market has shrugged off the losses from Monday, as exports are seen better than expected, while the production pace has started to ease,” Bagani said.
Dalian’s most-active soyoil contract DBYcv1 rose 1.63%, while its palm oil contract DCPcv1 added 2.07%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.73%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysian palm oil exports for May 1-25 rose between 2.4% and 3.1% from the month before, according to cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.
Cargo surveyor Societe Generale de Surveillance estimated the exports at 949,451 tons, compared with 931,938 tons a month earlier, according to LSEG.
Indonesia exported 2.56 million tons of palm oil products in March, up from 2.17 million tons in February, its palm oil association said.
Oil prices climbed, buoyed by expectations of strong fuel demand from the U.S. during the summer, ahead of an output policy decision from OPEC+ at a June 2 meeting. O/R
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit MYR=, palm’s currency of trade, strengthened 0.15% against the dollar, making the commodity more expensive for buyers holding the foreign currency.
Palm oil may test resistance at 3,949 ringgit per ton, a break above could open the way towards 4,002 ringgit, Reuters technical analyst Wang Tao said.