Malaysian palm oil futures gain despite increased local production

Malaysian palm oil futures experienced a second consecutive session of gains on Monday, supported by the strength of rival Dalian and Chicago oils. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed 0.64% higher at 3,921 ringgit ($822.53) per metric ton. This increase was in line with the performance of other oilseeds in the market.

However, the positive momentum was tempered by estimates from the Southern Peninsular Palm Oil Millers Association (SPPOMA) indicating a 4.11% rise in Malaysian palm oil production for the April 1-25 period. This data suggested an improvement in output from the world's second-largest palm oil producer.

Meanwhile, Dalian's most-active soyoil contract rose by 0.95%, and its palm oil contract saw a 1.39% increase. Similarly, soyoil prices on the Chicago Board of Trade went up by 0.44%. The competition among these oils in the global vegetable oils market influences palm oil prices significantly.

Looking ahead, cargo surveyors are set to release Malaysian palm oil export estimates for April on Tuesday. The decline in oil prices on Monday, attributed to easing tensions in the Middle East and U.S. inflation data, made palm oil less appealing as a biodiesel feedstock. The stability of the Malaysian ringgit against the dollar also played a role in the day's trading activities.

In conclusion, Malaysian palm oil futures showed resilience in the face of various market factors, with gains supported by international oil trends despite concerns over increased local production. The upcoming export estimates and global economic developments are expected to continue influencing palm oil prices in the near term.