Palm climbs 5% to its highest in more than one week
Malaysian palm oil futures jumped on Monday to their highest closing level in more than a week as markets tracked gains in rival Dalian and Chicago oils.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained 198 ringgit to 4,076 ringgit ($914.52) a tonne, rising for a second straight session. Palm fell 9.6% last week after two straight weekly gains.
The contract is mirroring a strong rally in soybean oil, with more short covering emerging as the price spread between soybean oil and palm oil widens, a Kuala Lumpur-based trader said.
The market is also cautious ahead of Indonesia’s export tax announcement and supply and demand data by the Malaysian Palm Oil Board (MPOB), the trader said.
MPOB data is due on Wednesday and it could provide clues amid concerns over a prolonged labour shortage hitting output in the world’s second-largest producer and increasing exports from neighbouring Indonesia.
Dalian’s most-active soyoil contract DBYcv1 rose 3.8%, while its palm oil contract DCPcv1 jumped 6.1%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 1.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil is expected to retest a support at 3,717 ringgit per tonne, a break below which could open the way towards 3,489-3,598 ringgit range, Reuters technical analyst Wang Tao said.
Source: Reuters (Reporting by Mei Mei Chu; Editing by Subhranshu Sahu and Uttaresh.V)