Malaysian palm oil futures rose more than 1% on Monday after a two-session slide, as support from stronger rival edible oils outweighed pressure from weaker crude oil prices.
The benchmark palm oil contract (FCPOc3) for September delivery on the Bursa Malaysia Derivatives Exchange gained 51 ringgit, or 1.14%, to 4,531 ringgit ($1,111.36) a metric ton by the midday break.
Strong performance of rival markets, which advanced more than 1% too, provided positive support, said a Kuala Lumpur-based trader.
Dalian's most-active soyoil contract (DBYcv1) rose 0.95%, while its palm oil contract CME:CPO1! added 1.15%. Soyoil prices on the Chicago Board of Trade (BOcv1) were up 1.59%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices inched lower after OPEC+ agreed to further increase its output targets from August while exports from key producers via the Strait of Hormuz are recovering, potentially adding to global supplies. O/R
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit FX_IDC:USDMYR, palm's currency of trade, weakened 0.25% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
Malaysia's palm oil inventories likely rose in June to their highest level on record for the month, as stronger production outpaced demand growth, a Reuters survey showed.
Palm oil may extend the loss towards the support at 4,440 ringgit per ton before stabilising around this level and then rising, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.0770 ringgit)