Palm gains on Dalian strength and posts second weekly gain

The contract for Malaysian palm oils futures rose again after two sessions of decline, boosted by the strength of Dalian and Chicago vegetable oil.

At closing, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange rose 47 ringgit (1.14%) to 4,152 Ringgit ($1,010.96) per metric ton.

The contract increased by 0.92% in the last week.

Anilkumar Bagani of Sunvin Group in Mumbai, the commodity research head, said that "Bursa Malaysia crude Palm Oil futures traded higher today due to bargain buying, following a bullish rebound in Dalian palm olein and expectations of a resumed Indian palm oil purchasing after washouts in some soyoil shipment."

Dalian's palm oil contract, which is the most active contract, rose by 0.94%. Chicago Board of Trade soyoil prices rose 0.19%.

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

Four trade sources reported that Indian refiners had cancelled about 70,000 tonnes of crude soyoil due for delivery in December and January because rising global prices, coupled with a weaker Indian rupee, made the local soyoil more affordable than imports.

Bagani said that the gains in Malaysian palm futures were limited by the risks of increased Malaysian palm oils stocks at the end of November and lower Indonesian palm export taxes in December.

According to Wang Tao, a technical analyst, palm oil could retest its resistance at 4,192 Ringgit per tonne as it has stabilized around the support at 4,093 Ringgit.

(source: Reuters)