Palm oil gains on Dalian palm oil

The price of Malaysian palm olein futures increased for the second session in a row on Tuesday. This was boosted by the recent Chinese stimulus measures that have boosted Dalian palm olein.

By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange was up 1.44% to 3,938 Ringgit ($919.45).

David Ng is a proprietary trader with Kuala Lumpur's Iceberg X Sdn. Bhd. He said that the rise in crude palm oil futures was due to the positive sentiment on the Dalian palm olein and the overnight gains in Chicago soy oil.

He said that the Dalian palm oil prices have increased mainly due to the stimulus measures announced by China's government, which has lifted the sentiment on the market.

Dalian's palm oil contract gained 1.42%, while the most active soyoil contract increased by 0.46%. Chicago Board of Trade soyoil prices were down by 0.47%.

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 trade currency strengthened by 0.07% versus the dollar. This made the commodity more expensive for foreign buyers.

Oil prices barely changed as traders assessed the potential impact of a breakdown in U.S. - Iran talks over Tehran's nuke programme on supply, a strong physical demand for Asia's first month and a cautious outlook on China's macro-economy.

Intertek Testing Services, a cargo surveyor in Malaysia, and AmSpec Agri Malaysia will release their estimates of exports for the period May 1-20 later that day.

A circular posted on the Malaysian Palm Oil Board's website revealed that Malaysia had lowered the crude palm oil price reference for June to a level that places it within the range of export duties between 9.5% and 10%.

Technical analyst Wang Tao stated that the price of palm oil could rise to a range between 3,946 and 3,981 ringgit for a metric ton. This is due to a wave C.

(source: Reuters)