Palm hits 4-1/2 month high on El Nino risk

Malaysian palm oil futures reached their strongest close in four and a half months on Monday, Business Recorder reported. The November contract on the Bursa Malaysia Derivatives Exchange rose 0.25% to 4,819 ringgit ($1,187.53) per metric ton, its loftiest settlement since April 3. The previous session had seen a 0.3% decline.

Traders appear to be factoring in the chance of lower output next year because of El Nino weather, a trader in Kuala Lumpur said. Far-month contracts, notably February to May 2027, traded above 5,000 ringgit, and the market stayed in contango. That trader added that firm forward prices suggest some participants are preparing for possible tighter supply in 2027.

Soyoil futures rose on the Dalian and Chicago exchanges, while crude oil prices were mixed as Middle East diplomacy made little progress. A firmer ringgit, up 0.64% against the dollar, made palm oil costlier for overseas buyers. Intertek Testing Services estimated August 1-15 exports fell 7.9% from a month earlier, whereas AmSpec Agri Malaysia reported a 3.2% rise. Separately, Indonesian President Prabowo Subianto announced plans for a new exchange to set prices for strategic commodities by early next year.