Palm oil closes at highest in four months tracking rival oils

Jakarta, Malaysia - Malaysian palm oil futures soared to their highest level in over four months on Monday, buoyed by robust performance in rival oils on the Dalian and Chicago exchanges. The benchmark October palm oil contract on the Bursa Malaysia Derivatives Exchange surged 47 ringgit, or 1%, to close at 4,724 ringgit ($1,155.58) per metric ton, marking the highest settlement since April 7.

A trader based in Kuala Lumpur attributed the firmness to favorable Dalian vegetable oil trends and a reported slowdown in production from Malaysia's Southern Peninsular Palm Oil Millers Association, providing a positive support signal. Malaysia's palm oil inventories hit a five-month high in July, reaching 2.63 million metric tons, reflecting a 3.32% monthly increase, as production volumes outpaced export demand, according to data released by the Malaysian Palm Oil Board on Monday.

These figures were in line with expectations, as noted by the trader. August 1-10 exports of Malaysian palm oil products increased by 14.8%, according to AmSpec Agri Malaysia, and Intertek Testing Services reported a 2.6% rise. Dalian's leading soyoil contract experienced a modest 0.13% increase, while its palm oil contract climbed 0.59%.

Palm oil prices mirrored those of other edible oils as they vie for market share, with soyoil prices on the Chicago Board of Trade up 1.16%. Despite optimistic talks of reopening the Strait of Hormuz, oil prices remained relatively unchanged on Monday due to Iran's insistence on meeting several preconditions before the waterway could reopen. Stronger crude oil futures have made palm oil a more appealing choice for biodiesel feedstock.