Palm climbs as bargain buying and short covering increases.

Malaysian palm futures climbed a little higher on Tuesday. They reversed earlier losses as bargain buyers appeared and short-covering activities provided additional support.

At the midday break, the benchmark palm oil contract on Bursa Derivatives Exchange for October delivery rose 20 ringgit (0.47%) to 4,262 Ringgit ($1,005.90), a metric tonne. The contract has fallen in the past two sessions.

A Kuala Lumpur trader reported that bargain buyers helped lift crude palm oil futures to positive territory by the close of the session.

The trader said that it could be possible that short coverings is driving up the market.

Dalian's palm oil contract grew 0.76%, while the most active soyoil contract climbed 1.4%. Chicago Board of Trade soyoil prices were down by 0.18%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.

The oil price continued to rise, boosted by the hopes for improved economic activity following the U.S. EU trade deal, a possible U.S. China tariff truce, and President Donald Trump’s shortened deadline for Russia's end of the Ukraine war.

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

The palm ringgit's trade currency, the dollar, has weakened by 0.21%, making it slightly cheaper for foreign buyers.

Technical analyst Wang Tao stated that palm oil could fall as low as 4,161 Ringgit per ton after it broke below the support level of 4,211 ringgit.

(source: Reuters)