KUALA LUMPUR: Crude palm oil (CPO) futures for March delivery extended their advance to a record for the contract on optimism that surging prices for rival soybean oil and petroleum will increase the appeal of the tropical oil in food and biofuels.
“Palm is up in line with a rising soy complex and crude oil prices,” said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental.
“Yesterday the correction we expected happened, but it quickly pulled back higher, implying the strong bullish sentiment that is pervading the entire edible oil complex.”
At 3.53pm, CPO for third month was up RM48 to RM3,426, off the intra-day high of RM3,440.
Soybean oil in Chicago climbed to the highest since 2014 as dry weather and labor strikes in Argentina worsen supply concerns at a time of strong demand.
Prices rose for the seventh day in eight. Crude oil is poised for a seventh weekly advance as U.S. lawmakers work on finalizing a stimulus package.
However, Indonesia’s plan to cut biodiesel use next year could cap gains in palm.
The Energy and Mineral Resources Ministry is seeking to reduce the volume of biodiesel blended with gasoil to 8.5 million kiloliters in 2021 from 9.2 million kiloliters, Djoko Siswanto, secretary general of the council, said.
The country has a mandate to use 30% of palm-biofuels with 70% diesel. - Bloomberg
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