PALM oil climbed for a second straight day as a gain in rival soybean oil prices boosted the tropical oil’s appeal.
Futures for November delivery climbed as much as 1.6% to RM4,250, before closing at RM4,200 in Kuala Lumpur. Soybean oil, palm’s closest substitute, rose as much as 1% in Chicago to snap two days of losses.
“Palm oil is being helped by external markets,” said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental Pte Ltd.
Dryness has gripped parts of US Midwest, threatening the soy crop during a critical stage of growth. While some rain relief is likely this week, this month’s weather remains vital to determining the ultimate size of the US harvest.
“However, the palm oil market lacks fundamental strength, which explains why it is struggling to maintain gains.
“Technically, prices are expected to hover between RM3,975 and RM4,500 in the short term,” Thiagarajan said.
Investors will be tracking exports from Malaysia, the second-biggest grower, as it’s an indicator of overseas demand. Shipments fell 1.9% in the first half of August from a month earlier, according to AmSpec Agri. Purchases by India, the top importer, may pick up during the festival season that ends with Deepavali in late October. — Bloomberg