Palm oil prices rise after a four-day decline as Dalian crudes offset lower crude

Malaysian palm oil futures rose on Thursday, after four consecutive sessions of losses. Gains in Dalian oils helped to support the market despite pressure from lower crude oil prices and Chicago soyoil.

By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for December delivery had gained 12 ringgit or 0.25% to 4,780 Ringgit ($1,173.01), a metric tonne.

The price of crude palm oil futures was cautious, as sentiment remained 'under pressure' after the recent weakness in crude oils and vegetable oils. However, firmer Dalian Futures provided some support. David Ng is a proprietary trader with Kuala -Lumpur based trading firm Iceberg X Sdn. Bhd.

Dalian's soyoil contract that is most active rose by 0.41% while palm oil contracts grew by 0.59%. Prices of soyoil on the Chicago Board of Trade were down by 0.43%.

Palm oil tracks the price movement of competing edible oils as it competes to gain a share in the global vegetable oils markets.

The oil prices fell after rising 4% the previous session. Iran stated that it was open to diplomacy in order to end the US/Iran war. However, the two countries are still far apart when it comes to the methods of doing so.

Palm oil is less appealing as a feedstock for biodiesel due to the weaker crude oil futures.

The palm ringgit's currency has strengthened by 0.12% against the dollar, making it slightly more expensive to buyers who hold foreign currencies.

The government announced late Wednesday that it had reduced the basic import duty for 'crude and refined edible oil, including palm oil, soybean oil?and sunflower oil.

Technical analyst Wang Tao stated that palm oil could'retest support' at 4,732 Ringgit per ton. A break below this level may cause a drop into the range of 4,677-4711, he said.

(source: Reuters)