KUALA LUMPUR: Malaysian palm oil futures rose for a second straight session on Monday, tracking higher rival soyoil and Dalian oils after US soybean supplies were projected to rise only slightly in marketing year 2021-2022.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange gained 67 ringgit, or 1.9%, to 3,589 ringgit ($888.81) a tonne by the midday break. It traded as high as 2.7% during the session.
Tight supply of palm and other key edible oils, combined with a higher Indonesian export levy to fund its biodiesel programme has spurred monthly crude palm oil prices, Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note.
Global edible oil supplies are expected to recover in the second half of the year, though a labour crunch in Malaysia, volatile weather and slow re-planting could keep crude palm oil prices above their historical 10-year average in 2021/2022, Ng said.
Exports of Malaysian palm oil products for Feb. 1 to 20 rose between 10.3% to 14.9% from the same period in January, according to cargo surveyors.
US stockpiles of soybeans are expected to increase slightly by the end of the 2021/22 marketing year, the US Department of Agriculture said on Friday, indicating a large crop planted this spring would alleviate some supply concerns.
Soyoil prices on the Chicago Board of Trade were up 0.5%. Dalian’s most-active soyoil contract and its palm oil contract both gained 2.4%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may retest a support at 3,465 ringgit, a break below which could cause a fall into 3,300-3,405 ringgit range, Reuters technical analyst Wang Tao said.