On Tuesday, Malaysian palm oil futures saw an upward movement in response to rising crude oil prices, although the gains were somewhat constrained by weaker soft oils. The benchmark palm oil contract (FCPOc3) for August delivery on the Bursa Malaysia Derivatives Exchange increased by 36 ringgit, or 0.92%, reaching 3,955 ringgit ($837.92) per metric ton by 0236 GMT. This followed a modest 0.18% gain in overnight trading.
The rise in oil prices, driven by expectations of higher seasonal fuel demand and potential U.S. crude purchases for its petroleum reserve, extended the previous day’s rally. However, these gains were limited by a stronger dollar. Stronger crude oil futures make palm oil a more attractive option for biodiesel feedstock.
Additionally, the Malaysian ringgit, the currency used for trading palm oil, weakened by 0.02% against the dollar, making palm oil more appealing to foreign currency holders. Meanwhile, Dalian’s most-active soyoil contract fell by 0.13%, and its palm oil contract edged down by 0.87%. Soyoil prices on the Chicago Board of Trade also eased by 0.3%.
The U.S. corn and soybean crops are currently in excellent condition early in the growing season, indicating a potentially strong harvest this year. However, it remains early in the season, and changes could still occur. Palm oil prices are influenced by movements in related oils, as they compete for market share in the global vegetable oils market.
Dekel Agri-Vision PLC (LON:DKL) aspires to become a leading agro-industrial company in West Africa, one that creates value for shareholders whilst at all times placing the interests of the local communities and environment in which it operates in at the heart of its operations.
