KUALA LUMPUR- Malaysian palm oil futures closed higher on Monday, on a weaker ringgit and fears about tighter global supplies, although weaker crude prices and expectations of declining exports in the second half of July capped gains.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange closed up 8 ringgit, or 0.19%, to 4,145 ringgit a tonne. The contract climbed for a fourth session in five.
Absence of labourers due to rising COVID-19 cases is haunting Malaysian palm oil plantations, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
The Southern Peninsula Palm Oil Millers' Association has estimated production during July 1-15 fell by 3.5% from the corresponding period in June, Bagani said.
Hot, dry weather in the United States is also pushing up prices of soybeans on the Chicago Board of Trade as the crop approaches its key pod-setting phase.
Soyoil prices on the Chicago Board of Trade were up 0.4%. Dalian's most-active soyoil contract rose 0.3%, while its palm oil contract gained 1%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The ringgit, palm's currency of trade, fell 0.36% against the dollar, making the commodity cheaper for holders of foreign currency.
Investors now eye top producers Indonesia and Malaysia to announce their palm oil exports duties and levies for August, as well as July 1-20 export data by cargo surveyors due this week.
Market speculations have pegged export shipments from Malaysia in that period to decline around 7% on the month.
Oil prices fell over 2% as OPEC+ agreed to boost output, sparking concerns about a surplus and making make palm a less attractive option for biodiesel feedstock.
The Malaysian bourse will be closed on Tuesday for a public holiday.
($1 = 0.2377 ringgit)
(Reporting by Mei Mei Chu; editing by Vinay Dwivedi, Subhranshu Sahu and Uttaresh.V) ((Meifong.chu@thomsonreuters.com))
