KUALA LUMPUR: Malaysian palm oil futures traded sideways on Tuesday ahead of the Christmas holiday as profit taking capped gains.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was up 13 ringgit, or 0.29%, at 4,555 ringgit ($1,015.83) a metric ton at the close. Crude palm oil futures traded sideways to lower on profit taking ahead of the Christmas holidays, said Anilkumar Bagani, commodity research head at Sunvin group.
The contract gained 2.46% on Monday, snapping six straight sessions of losses, lifted by stronger Dalian soyoil prices and as traders bought cheaper contracts after the recent bout of declines. Indonesia’s plan to expand its biodiesel mandate from Jan. 1 is now largely priced in, Bagani said.
The plan looks increasingly likely to be implemented gradually, analysts said last Wednesday, as industry participants seek a phase-in period. Dalian’s most-active soyoil contract rose 1.06%, while its palm oil contract gained 1.47%. Soyoil prices on the Chicago Board of Trade were up 0.12%. Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market. Oil prices rose on Tuesday, reversing the prior session’s losses, buoyed by a slightly positive market outlook for the short term despite thin trade ahead of the Christmas holiday.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, strengthened 0.07% against the dollar. A stronger ringgit makes palm oil more expensive for foreign currency holders.
The Bursa Malaysia Derivatives Exchange will be closed on Wednesday for Christmas.
Source: Brecorder
