Malaysian palm oil futures rose on Monday for a second straight session, supported by cargo surveyor data showing robust exports and Indonesia's mandatory biodiesel blending.
The benchmark palm oil contract (FCPOc3) for September delivery on the Bursa Malaysia Derivatives Exchange gained 14 ringgit, or 0.31%, to 4,582 ringgit ($1,128) a metric ton by the midday break.
The market is supported by strong export in June and further strengthened by Indonesia's mandatory minimum inclusion policy under the B50 mandate, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari.
Indonesia is scheduled to launch its B50 biodiesel programme, lending 50% palm oil-based biodiesel with 50% conventional diesel, on July 1.
Cargo surveyors estimated that exports of Malaysian palm oil products during June 1 to 25 rose between 10.6% and 11.1% from a month earlier. They are expected to release their estimates for the full month on Tuesday.
"Production in Peninsular Malaysia is also experiencing a better-than-expected recovery, although East Malaysia is still recording lower output. Weather conditions remain benign and are expected to remain so, probably to the third quarter of the year," Supramaniam said.
Supramaniam said he expects prices to remain largely rangebound, at least until the release of the Malaysian Palm Oil Board report on July 10.
Dalian's most-active soyoil contract (DBYcv1) rose 0.62%, while its palm oil contract CME:CPO1! gained 1.01%. Soyoil prices on the Chicago Board of Trade (BOcv1) were up 0.27%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices rose following days of tit-for-tat strikes by the U.S. and Iran that underscored the fragility of their interim peace deal and again slowed energy shipping through the Strait of Hormuz. O/R
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit FX_IDC:USDMYR, palm's currency of trade, strengthened 0.59% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Palm oil may retrace into a range of $4,517 to $4,538 ringgit per ton before resuming its rise, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.0610 ringgit)