Palm bounces back with strong crude oil

Malaysian palm futures rose?on Thursday, and reached the highest levels in a month. This was aided by an increase in crude oil prices.

By midday, the benchmark palm 'oil contract on the Bursa Derivatives exchange for May delivery?added 36 ringgit (0.86%) to $4,215 ringgit (1,069.25 USD) per metric ton. The price of a metric ton rose up to 4,220 Ringgit earlier in the day, its highest level since the 5th of February.

"Bursa Malaysia crude palm oil futures recovered from their early losses." Palm?oil's recovery is attributed to a major shift in the price dynamics, as palm oil now trades at a discount to gas oil because of the Middle East tensions.

He added that the threat of "disruptions" to vegetable oil shipping routes through the Middle East has also supported palm oils prices, as it could benefit due to higher demand because of constrained supply for soy oil and sunflower oil.

Dalian's palm oil contract gained?0.58%, while the most active soyoil contract increased by 0.07%. Chicago Board of Trade Soy Oil gained 1.05%.

As palm oil competes to gain a piece of the global vegetable oils market, it tracks the price fluctuations of its rival edible oils.

Oil?prices soared by more than 3% Thursday, extending a rally amid fears that Middle East 'oil and gas' supplies could be disrupted for a long time due to the escalating U.S. - Israel war against Iran.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

Technical analyst Wang Tao stated that palm oil?FCPOc3 could retest support?at 4,138 Ringgit per metric tonne. A break below this level would trigger a drop into the range of 4,098-4121 Ringgit.

(source: Reuters)