KUALA LUMPUR: Malaysian palm oil futures rose on Thursday, buoyed by strength in rival Dalian contracts and a weaker ringgit although losses in crude oil capped the gains.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained 68 ringgit, or 1.77%, to 3,913 ringgit ($917.47) a metric ton at 0246 GMT.
Palm rises on estimates of higher exports, stronger rival oils
The contract rose 3% in the previous session, its biggest single-session climb since July 24, 2023.
Fundamentals
Dalian’s most-active soyoil contract rose 0.82%, while its palm oil contract added 2.33%. Soyoil prices on the Chicago Board of Trade were down 0.15%.
Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
The ringgit, palm’s currency of trade, weakened 0.5% against the dollar, making the commodity less expensive for buyers holding foreign currencies.
Oil prices fell in Asian trading after a larger-than-expected Federal Reserve interest rate cut sparked concerns about the US economy.
Brent crude futures for November were down 0.29% at $73.44 a barrel as of 0236 GMT. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Crude palm oil prices are expected to remain stable this month, as a strengthening ringgit currency offset tighter supplies and stagnant exports to key destinations, state agency the Malaysian Palm Oil Council (MPOC) said on Wednesday.
The MPOC said prices would be seen trading within a range of 3,850-4,050 ringgit a metric ton in September.
Palm oil may retrace into a range of 3,819 ringgit to 3,833 ringgit per metric ton, as a bounce from the Sept. 17 low of 3,702 ringgit may end around resistance at 3,893 ringgit, Reuters technical analyst Wang Tao said.
Source: Brecorder
