Palm rises 1% on strong demand, olein; high stocks caps gains

Malaysian palm oil futures rose 1% on Monday to close at 4,638 ringgit ($1,136.49) a metric ton, reversing the previous session's loss, according to Business Recorder. The gain in the December contract on the Bursa Malaysia Derivatives Exchange was 46 ringgit. Firmer prices for Dalian palm olein and strong export figures underpinned the rise, while record September stockpiles limited it.

Stockpiles in September climbed to 3.51 million metric tons after output hit an all-time high. Production rose 16.48% to 2.12 million tons, beating the August 2015 peak, while exports slid 12.13% to 1.12 million tons, their second monthly decline in a row. Cargo surveyors estimated exports for October 1 to 10 were up between 33.5% and 37.7% from the previous month.

Palm oil follows rival edible oils, competing with them for a slice of worldwide vegetable oil sales. Stronger crude futures also make palm more appealing as a feedstock for biodiesel. The ringgit, the trading currency for palm, gained 0.05% against the dollar, a move that leaves the commodity marginally dearer for overseas purchasers.