KUALA LUMPUR: Malaysian palm oil futures edged higher on Wednesday for a second straight session, despite profit-taking pressure and concerns that a widening premium over rival oils could dampen demand. The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 58 ringgit, or 1.25%, to 4,695 ringgit ($1,073.14) a metric ton at the close.
The contract has risen 3.67% over two consecutive sessions. The market will be closed on Thursday for a holiday. Crude palm oil futures prices demonstrated resilience in the previous session but a slight retracement is expected due to profit taking activities, said Darren Lim, a commodities strategist with Singapore-based brokerage firm Philip Nova.
“Optimism about an uptick in Chinese demand following details of a potential fresh stimulus package had supported speculative buying above the 4,600 ringgit level. “Traders will also be closely monitoring developments in related vegetable oils, as the widening premium will ultimately reduce demand for palm compared to its substitutes, keeping gains capped,” Lim added.
Dalian’s most-active soyoil contract rose 0.5%, while its palm oil contract added 1.29%. Soyoil prices on the Chicago Board of Trade were up 0.82%. Palm oil tracks price movements of rival edible oils, as they compete for a share in the global vegetable oils market.
Source: Brecorder
