Palm oil futures ended higher on Wednesday, as warm weather threatened the supply of palm and rivaledible oils in Asia amid the high-demand festive season in India.
The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange rose 80ringgit, or 2.04%to 4,010 ringgit ($864.78) per metric ton, up for a second straight session.
The Dalian palm contract DCPcv1, meanwhile, climbed 0.4%.
Hot and dry weather in India has squeezed crop yields amid higher demand during the festive season, offsetting concerns from existing high port inventories, said Mitesh Saiya, trading manager at Mumbai-based firm Kantilal Laxmichand and Co.
Dalian’s most-active soyoil contract DBYcv1 was up 0.1%, while its price on the Chicago Board of Trade BOcv1 rose 0.7%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
An unusually dry August has taken a toll on cereal and oilseed crops in Asia as El Nino intensified, and forecasts for lower rainfall in September are further threatening to disrupt supplies.
European Union soybean imports in the 2023/24 season had reached 2.16 million tons by Aug. 27, up 10% from a year earlier, data published by the European Commission showed on Tuesday.
India is poised for its lowest monsoon rains in eight years, with El Nino seen crimping September precipitation after an August that is on track to be the driest in more than a century, two weather department officials told Reuters on Monday.
The Malaysian ringgit MYR=, palm’s currency of trade, firmed 0.13%against the dollar, but remained near an over one-month low. A weaker ringgit generally makes palm oil more attractive for foreign currency holders.
Palm oil FCPOc3 may break a resistance at 3,963 ringgit per metric ton, and rise into the 4,017-4,050 ringgit range, said Reuters technical analyst Wang Tao. TECH/C