Palm rises on stronger Dalian rivals but weak Chicago soyoil limits gains
KUALA LUMPUR: Malaysian palm oil futures opened higher for a second straight session on Monday, supported by stronger rival Dalian oils, though weaker Chicago soyoil capped gains.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained RM23, or 0.59 per cent, to RM3,940 (US$930.34) a metric ton in early trade.
Dalian's most-active soyoil contract rose 0.7 per cent, while its palm oil contract added 0.64 per cent. Soyoil prices on the Chicago Board of Trade were down 0.04 per cent.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Chicago soybean and corn futures eased, with both markets giving up some of last week's gains as focus turned on crucial talks due to start between top agricultural trading partners, the United States and China.
Oil prices held on to last week's gains early on Monday as investors waited for US-China trade talks to be held in London later in the day.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm's currency of trade, weakened 0.24 per cent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
Free trade negotiations with the European Union, which have been ongoing for nine years, are expected to be concluded by the end of June, Indonesia said. Both parties have previously disagreed on EU trade rules for products with potential links to deforestation that could affect Indonesian palm oil.
Palm oil looks neutral in a narrow range of RM3,889 to RM3,925 per metric ton, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.
Shares jumped and the dollar pared recent gains as Asian markets reacted to better-than-expected US jobs data ahead of talks in London aimed at mending a trade rift between the United States and China.
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