Palm extend gains for second session on firmer crude, weak ringgit

KUALA LUMPUR: Malaysian palm oil futures extended gains for a second straight session on Tuesday, buoyed by firmer crude oil prices and a weaker ringgit, though softer Chicago soyoil capped the gains.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained RM12, or 0.26 per cent, to RM4,590 (US$1,123.49) a metric ton in early trade.

Brent crude gained 0.5 per cent to US$100.83 a barrel by 0240 GMT

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Soyoil prices on the Chicago Board of Trade were down 0.1 per cent. The Dalian Commodity Exchange is closed for a public holiday and will reopen on October 8.

Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

The ringgit, palm's currency of trade, weakened 0.02 per cent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

Indian sunflower oil imports fell in September to their lowest level in more than four years after the Ukraine war disrupted shipments, prompting refiners to increase palm oil purchases to their highest level in seven months, five dealers said.

Malaysia's palm oil inventories are expected to hit an all-time high in September, topping the December 2018 peak, as production soared to record volumes outpacing sluggish export demand, a Reuters survey showed.

Palm oil may extend its bounce into a range of RM4,656 to RM4,677 per metric ton, as suggested by its wave pattern and a channel technique, Reuters technical analyst Wang Tao said.

Asian stocks rose on Tuesday after a tech-fuelled rally lifted the Nasdaq to a record close, with a retreat in oil prices offering further support even as longer-dated Treasury yields hovered near multi-decade highs.