Palm oil extends its gains as rival oils rise; traders focus on production data
Malaysian palm oil futures gained for a third consecutive session on Tuesday, boosted by higher prices of related oils, though expectations of increased production could limit the upside.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for July delivery had gained 38 ringgit or 0.83% to 4,597 Ringgit ($1,163.50), a metric tonne.
The contract increased the 2.45% increase recorded in?the two previous sessions.
Market sentiment will likely remain strong, supported by the strength of Dalian RBD Palm olein futures and Chicago soybean oil. Price movements may remain volatile due to uncertainty over the U.S. Iran peace talks, a Kuala Lumpur based trader stated.
The trader stated that market participants will likely focus on the forthcoming production data of the Malaysian Palm Oil Association MPOA to get a clearer direction.
Forecasts of higher production could limit future upside.
An official from the Energy Ministry said that Indonesia had consumed 3.9 millions kilolitres palm-based biodiesel in total under its mandate to blend biodiesel. They were also preparing for a further increase in the blending rate.
Dalian's palm oil contract grew by 2.16%, while the most active soyoil contract climbed 1.3%. Prices of soyoil on the Chicago Board of Trade rose by 0.18%.
Palm oil tracks the price movements of competing edible oils as it competes to gain a share in the global vegetable oils market.
The palm ringgit's currency, the dollar, has weakened by 0.15%, making it cheaper for buyers of foreign currencies.
Technical analyst Wang Tao stated that palm oil will 'test a resistance at 4,639 Ringgit per metric ton. A break above this could lead to gains in the range of 4,693-4760 Ringgit.
(source: Reuters)
