Palm gains from stronger palm olein and soyoil
The price of Malaysian palm oil futures rose on Wednesday. This was due to the firmness of?Chicago palm olein, Dalian palmolein, and soyoil. However, a stronger ringgit limited further gains.
After two consecutive sessions of gains, the benchmark palm oil contract for?April delivery at the Bursa Derivatives exchange gained 5 ringgit or 0.12% to 4,265 Ringgit ($1,089.68).
The futures continue to show a broader upward trend, riding the bullish 'waves' of Chicago's Soyoil and Dalian's Palm olein. They also ride the upward momentum in energy prices, said Anilkumar bagani, head of commodity research at Mumbai-based brokerage Sunvin Group.
He added that weaker production and healthy exports in the month of January also helped to keep palm oil's bullish momentum. However, a stronger Ringgit has limited its gains.
Dalian's palm oil contract gained 1.31%, while the most active soyoil contract grew?1.29%. Chicago Board of Trade soyoil prices were up by 0.81%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.
The palm ringgit's currency has strengthened by 0.89% against dollars, making the commodity more costly for buyers with foreign currencies.
The price of oil rose on Wednesday, as concerns about supply remained after the winter storm that disrupted U.S. crude exports and production. Middle East tensions also aided in this rise.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The cargo surveyor, Intertek Testing Services, reported that exports of palm oil products from Malaysia for the period?January 1-25 were up 9.97% compared to a month ago, while AmSpec Agri Malaysia, an independent inspection company, put it at 7.97%.
Technical analyst Wang Tao suggested that the palm oil price may be retraced into a range between 4,201-42,215 ringgits per ton based on its hourly MACD and wave pattern.
(source: Reuters)
