Palm oil prices rise on Chicago soyoil production, May outlook
After five consecutive sessions of declines, Malaysian palm oils futures rose Tuesday. Supported by the strength in Chicago soyoil, and with the focus now shifting to production forecasts for May, the prices were boosted by the recent gains in Chicago soyoil.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for July delivery had gained 6 ringgit or 0.16% to 3,833 Ringgit ($906.79) per metric ton.
Anilkumar bagani, research head at Mumbai-based Sunvin Group, said that the futures prices opened lower, but recovered steadily. The high production gain scenario for April has been traded out, so the focus now is on the performance of May.
Dalian's palm oil contract, which is the most active contract, fell by 0.89%. Chicago Board of Trade soyoil prices were up by 0.33%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.
The palm's trade currency, the ringgit, fell by 0.79% in value against the U.S. Dollar, making it cheaper for buyers who hold foreign currencies.
The oil prices rose over 1% Tuesday, with technical rebounding and dip-buying following a decline in the previous session. This was due to OPEC+'s decision to increase output. However, concerns about the outlook for a market surplus persisted.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
According to Wang Tao, technical analyst, palm oil could retest its support level at 3,765 Ringgit per metric tonne. A break below this mark would open the door to 3,702 Ringgit.
(source: Reuters)
