Palm oil climbs to five-month high on higher soyoil, supply worries

Malaysian palm oil futures rose more than 1.5% on Monday, extending last week's sharp gains to hit five-month highs on stronger rival soyoil and concerns over supply.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange rose 42 ringgit, or 1.61%, to 2,656 ringgit ($622.89), its highest since Feb. 17, in early trade.

Palm prices jumped 3.7% on Friday, adding 8.4% for the week, as heavy rains in top producers Indonesia and Malaysia fuelled worries about disruption to harvesting.

FUNDAMENTALS

Malaysia is planning to file a World Trade Organisation (WTO) case against the European Union over its restrictions on palm oil biofuel by this year, Deputy Commodities Minister Willie Mongin said.

U.S. soybean futures edged higher as strong export demand pushed prices to a 10-day high.

Dalian's most-active soyoil contract rose 2.54%, while its palm oil contract was up 3.83%. Soyoil prices on the Chicago Board of Trade were up 0.52%.

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 rise into a range of 2,653-2,677 ringgit per tonne, as suggested by its wave pattern and a projection analysis, Reuters technical analyst Wang Tao said.

MARKET NEWS

Asian shares began warily as investors eyed efforts to stitch together more fiscal stimulus in the eurozone and United States to help economies ride out the effects of a record jump in COVID-19 cases globally.