Palm catches up with Dalian rivals, strengthening ringgit caps the advance
The Dalian Commodity Exchange's strength in edible oils rivals helped to support the palm oil futures on Thursday. However, the stronger ringgit limited the gains.
By midday, the benchmark palm 'oil 'contract for February delivery at the Bursa Derivatives exchange in Malaysia rose 46 ringgit or 1.13% to $4109 ringgit (US$1,000.97) per metric ton.
The futures traded today in positive territory due to the strength of rival oils. The February contract reached a morning high of 4,128 ringgit. However, the price did not sustain due to a stronger ringgit.
Dalian's most-active palm oil contract grew 0.93%, while the soyoil contract grew 0.55%. Prices of soyoil on the Chicago Board of Trade dropped by 0.27%.
As palm oil competes to gain a share of the global vegetable oil market, it tracks the price changes of competing edible oils.
The Malaysian Ringgit, the palm industry's currency of trade, has strengthened by 0.27% against the U.S. Dollar, making it more expensive for holders of foreign currencies.
Oil prices were stable, as investors focused on the Russia-Ukraine talks and watched for any negative effects from a U.S. seize of a tanker sanctioned by the United States off Venezuela's coast.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Malaysian palm oil stocks reached a six-and-a half-year high during November as production outpaced weak exports. This was revealed by data released on Wednesday by the industry regulator.
Malaysian palm oil production will surpass 20 million metric tonnes for the first year this year, thanks to improved harvesting techniques, increased?labour supply and maturing plantations.
AmSpec Agri Malaysia, an independent inspection company, said that exports of Malaysian palm oil products fell 10% between November 1-10 and December 1-10. Intertek Testing Services reported a 15% drop.
According to Wang Tao, technical analyst, palm oil could test resistance at 4141 ringgit/metric ton. A break above this level would open the door to 4,194 ringgit.
(source: Reuters)
