Palm extends its gains over strong rival oils
Malaysian palm futures closed higher for the third session in a row on Thursday, following gains in other edible oils. However, higher production estimates, and a stronger Ringgit, capped this rise.
The benchmark contract for palm oil delivery in October on the Bursa Derivatives exchange gained 15 ringgit or 0.35% at $4,330 ringgit (1,027.77 USD) per metric ton.
Anilkumar bagani, Sunvin Group's research head, said that the higher-than expected production scenario had halted the palm oil price rally. The ringgit is strengthening against the U.S. Dollar, contributing to the fall in the contract denominated in ringgit.
Bagani added that the sharp rise in palm oil prices has slowed India's purchases of new palm oil, adding to their cautious mood.
Dalian's palm oil contract grew by 1.34%, while the most active soyoil contract increased by 1.16%. Chicago Board of Trade soyoil prices were up by 0.59%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks price changes of competing edible oils.
The palm ringgit's trade currency strengthened by 0.28% against dollars, increasing the price of the commodity for buyers who hold foreign currencies.
Oil prices rose more than 1%, buoyed by optimism over U.S. trade negotiations that would ease pressure on the global economy and a sharper-than-expected decline in U.S. crude inventories.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The Indonesia Palm Oil Association reported that Indonesian palm oil stocks had decreased by 4.27% in May compared to the previous month, to 2.9 millions metric tons. This was due to an increase in exports.
(source: Reuters)
