Palm oil surges 3% on higher rival oils, better July exports

Kuala Lumpur: Malaysian palm oil futures rose 3 per cent on Monday, tracking sharp gains in Dalian palm oil and rival soy oil, with higher July exports also supporting prices.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange advanced 3.06 per cent to 2,759 ringgit ($651.48) per tonne at 0244 GMT, its third straight day of gains.

The contract rose 16.5 per cent in July, the most in a month since September 2015.

Fundamentals

Malaysia's palm oil exports in July rose 5.8 per cent from June, cargo surveyor Intertek Testing Services said on Friday.

Dalian's most-active soyoil contract rose 2.49 per cent, while its palm oil contract was up 3.47 per cent. Soyoil prices on the Chicago Board of Trade also gained 0.94 per cent.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Indonesia's plans to raise the bio-content of its palm oil-based biodiesel to 40 per cent - known as B40 - is back on schedule with a target for implementation by July 2021.

Palm oil may test a resistance at 2,703 ringgit per tonne, a break above which could lead to a gain to 2,756 ringgit, Reuters technical analyst Wang Tao said.

Market news

Asian share markets turned mixed on Monday as U.S. lawmakers struggled to hammer out a new stimulus plan amid a global surge of new coronavirus cases, though a squeeze on crowded short positions gave the dollar a rare bounce.

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