Palm closes at highest in nearly two weeks on weather worries
Malaysian palm oil futures rose on Thursday for a sixth session and their highest close in nearly two weeks, buoyed by concerns over wet weather and by a rally crude oil prices.
The benchmark palm oil contract FCPOc3 for December delivery on the Bursa Malaysia Derivatives Exchange gained 59 ringgit, or 1.62%, to 3,701 ringgit ($798.49) a tonne after rising as much as 4.4% earlier in the session.
Palm oil prices are probably being driven by demand and discounts to soft oils, said Marcello Cultrera, director at commodities consultancy Apricus 8 in Kuala Lumpur.
Expectations of a drop in Southeast Asian palm oil production from November to February owing to potential La Nina weather disruption also supported the contract, he said.
Oil prices stabilised near three-week highs after the OPEC+ producer group agreed to further tighten global crude supply with a deal to cut production by about 2 million barrel per day, the largest reduction since 2020.
Stronger crude oil futures make palm a more attractive option as biodiesel feedstock.
Soyoil prices on the Chicago Board of Trade BOcv1 fell 1.6%. The Dalian exchange was closed for the week for holidays.
Palm oil is affected by price movements in related oils that compete in the global vegetable oils market.
Source: Reuters (Reporting by Mei Mei Chu Editing by Subhranshu Sahu and David Goodman)