Malaysian palm oil futures ended higher on Thursday for a third consecutive session, tracking gains in rival edible oils, though higher production estimates and a stronger ringgit capped the rise.

The benchmark palm oil contract FCPO1! for October delivery on the Bursa Malaysia Derivatives Exchange gained 15 ringgit, or 0.35%, at 4,330 ringgit ($1,027.77) a metric ton at the close.

“The higher-than-expected production scenario has halted the rally in palm oil prices, while the ringgit continues to strengthen against the U.S. dollar, which is also contributing to the decline in the ringgit-denominated contract,” said Anilkumar Bagani, research head at Sunvin Group.

Adding to the cautious mood, fresh palm oil purchases by India have slowed down due to a sharp surge in prices, Bagani said.

Dalian’s most-active soyoil contract (DBYcv1) rose 1.16%, while its palm oil contract CPO1! added 1.34%. Soyoil prices on the Chicago Board of Trade ZL1! were up 0.59%.

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

The ringgit USDMYR, palm’s currency of trade, strengthened 0.28% against the dollar, making the commodity more expensive for buyers holding foreign currencies.

Oil prices rose more than 1%, buoyed by optimism over U.S. trade negotiations that would ease pressure on the global economy and a sharper-than-expected decline in U.S. crude inventories.

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

Indonesia’s palm oil stocks at the end of May had contracted by 4.27% from the previous month to 2.9 million metric tons after a surge in exports, data from the Indonesia Palm Oil Association showed.
Source: Reuters