Palm oil prices rise on Chicago soyoil and crude oil firmer, while the ringgit is soft.
The price of Malaysian palm oils futures increased on Wednesday. This was due to gains in the rival Chicago soyoil market, higher crude oil prices, and a weaker Malaysian ringgit.
By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for October delivery had gained 45 ringgit or 1.08% to 4,208 Ringgit ($990.58).
Anilkumar bagani, the research head at Mumbai-based Sunvin Group, said that "the futures opened higher today following a resurgent move in Chicago soyoil futures, ICE Canola futures and Euronext Rapeseed Futures on Tuesday night and an increase in Asian hour for Chicago soyoil prices and energy today."
Prices of soyoil on the Chicago Board of Trade have increased by 0.77%. Dalian's soyoil contract was the most active, rising 0.4%. Palm oil contracts were slightly down 0.07%.
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 prices increased, driven by the expectation of a strong summer in the two world's largest consumers: the U.S.A. and China. However, analysts cautioned about the economy as a whole.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency, the dollar, fell by 0.21%, making the commodity more affordable for holders of other currencies.
AmSpec Agri Malaysia, an independent inspection company in Malaysia, estimates that exports of palm oil products from Malaysia for the period July 1-15 have dropped by 5.3% when compared to the period June 1-15. Cargo surveyor Intertek Testing Services expects a drop of 6.2%.
Technical analyst Wang Tao stated that palm oil could retest the resistance level of 4,231 ringgit for a metric ton. A break above this would lead to gains in the range 4,254-42,292 ringgit. ($1 = 4.2480 ringgit)
(source: Reuters)
