19/06/2023 (Nasdaq), Kuala Lumpur - Malaysian palm oil futures ticked up on Monday as concerns over dry weather taking a toll on global production of palm and soybeans kept the contract near six-week highs.

The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange gained 30 ringgit, or 0.8%, to 3,773 ringgit ($817.91) per metric ton by the midday break.

The market seems to be steady with expectations of some yield losses in Malaysia due to hot and dry weather, said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.

But Indonesia has been putting pressure on the market by selling cheaper palm olein as production has increased, and it is now looking to capture more market share, he added.

Signs of a worsening drought in the U.S. Midwest have also heightened soybean crop concerns, pushing Chicago soybean futures to hit their highest in nearly six weeks on Friday.

The soyoil market on the Chicago Board of Trade BOcv1 was closed for a public holiday.

Dalian's most-active soyoil contract DBYcv1 rose 2.2%, while its palm oil contract DCPcv1 gained 2.8%.

Global oil prices fell, backing off last week's gains as questions over China's economy outweighed OPEC+ output cuts and the seventh straight drop in the number of oil and gas rigs operating in the United States. O/R

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

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 retest a resistance at 3,791 ringgit per metric ton, driven by a powerful wave c, Reuters technical analyst Wang Tao said. TECH/C

($1 = 4.6130 ringgit)

Source: Reuters

https://www.nasdaq.com/articles/vegoils-palm-oil-rise-as-weather-concerns-lend-support