Palm oil climbs due to short covering and the stronger Dalian oils

The price of Malaysian palm oils futures rose on Wednesday, for the fourth consecutive session. This was due to traders covering short positions and Dalian oil prices rising.

The benchmark contract for palm oil delivery in August on the Bursa Derivatives exchange gained 31 ringgit or 0.8% to 3,899 Ringgit ($923.93) per metric ton.

Anilkumar bagani, research director of Mumbai-based vegetable oils broker Sunvin Group, stated that crude palm oil futures continued to trade higher as a result of the short covering observed on Tuesday, and the strength in the Chinese market for vegetable oils.

Bagani said that the ringgit was stable and the soyoil market in North America and South America did not provide any direction.

Dalian's palm oil contract, which is the most active contract, increased by 0.95%. Chicago Board of Trade soyoil prices were up by 0.4%.

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

The oil price rose after the U.S. banned Chevron from exporting Venezuelan crude, but gains were limited by an expected decision made later this week by OPEC+ to increase production for July.

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

The palm ringgit's trade currency strengthened by 0.35% against dollars, making it slightly more expensive for buyers who hold foreign currencies.

The European Commission published data that showed the imports of soybeans by the European Union for the 2024/25 crop season which began in the summer reached 12,69 million metric tonnes by May 25. This was up 7% compared to the same period last year, and palm oil imports fell by 19%. ($1 = 4.2200 ringgit)

(source: Reuters)