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Palm oil prices rise as Dalian crude and the weakening ringgit support.

Malaysian palm futures continued to rise on Monday. They tracked stronger edible oils in Dalian and crude oil, and were supported by the weaker ringgit.

By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for September delivery had gained 32 ringgit or 0.77% to 4,206 Ringgit ($989.41).

Darren Lim said that the firm crude oil prices continue to support edible oil markets worldwide.

The slight weakening of the ringgit has also maintained buying interest, making Malaysian Palm Oil more competitive abroad.

Dalian's palm oil contract, which is the most active contract in Dalian, gained 0.62%. Chicago Board of Trade soyoil prices rose by 0.02%.

As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.

Oil prices increased, adding to gains that exceeded 2% on Friday as investors viewed further U.S. Sanctions against Russia, which may have an impact on global supplies. However, a surge in Saudi production and tariff uncertainty tempered gains.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The palm ringgit's trade currency, the dollar, has weakened by 0.02%, making the commodity more affordable for buyers who hold foreign currencies.

Data from the industry regulator showed that Malaysian palm oil stocks increased by 2.41%, reaching a 18-month high at 2.03 million tonnes at the end June.

According to data provided by cargo surveyor Intertek Testing Services, and inspection company AmSpec Agri Malaysia, exports of Malaysian products containing palm oil during the period July 1-10 rose between 5.3% to 12% compared to a month ago.

Technical analyst Wang Tao stated that palm oil could test support at 4,134 Ringgit per metric tonne and a breakdown would trigger a fall towards the range of 4,034-40558 Ringgit. ($1 = 4.2510 ringgit)

(source: Reuters)