Palm oil is gaining to follow Chicago soyoils and crude oil higher
The price of Malaysian palm oils futures rose on Tuesday. This ended a three-session losing streak, boosted by the strength of crude oil, Chicago soyoil and a weaker Ringgit.
By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange rose by 1.15%, to 4,233 Ringgit ($944.87) per metric ton.
Fears of an expanding global trade war led to a partial recovery of the 7.5% loss that the contract had suffered over the previous three sessions.
Palm oil prices mirror the recovery in the energy markets and U.S. Soyoil Prices - Oil prices increased more than 1% and soyoil on the Chicago Board of Trade gained 0.90%.
Palm oil becomes more attractive as a biodiesel feedstock when crude oil futures are stronger. Palm oil tracks the price movement of other edible oils, as it competes to gain a share in the global vegetable oils markets.
A Kuala Lumpur based trader noted that palm oil may struggle to remain upbeat due to weak fundamental factors. He also mentioned the expectation of higher stock levels in March.
A survey on Friday showed that Malaysian palm oil inventories likely increased for the first six-month period in March, as production recovered. However, global demand is still sluggish due to tariff concerns.
Dalian's palm oil contract dropped 0.57%, while the most active soyoil contract declined 0.83%.
The palm ringgit's currency has been hovering near its lowest level in two months against U.S. dollars, making the commodity more affordable for buyers with foreign currencies.
A break above this level could result in a rise to the range of 4,323-4362 ringgit.
(source: Reuters)
