Palm oil prices rise on expectations of stronger export data

Malaysian palm futures rose on Wednesday, continuing gains for a fourth consecutive session on the expectation of better export data in August.

By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for October delivery had gained 57 Ringgit or 1.29% to 4,459 Ringgit ($1,056.89).

"Palm Oil extends gains due to expectations of stronger exports for August, despite the end-July stocks reaching a high of 19 months," said Darren Lim. Commodities strategist at Singapore-based Phillip Nova.

The market is optimistic after strong export estimates by cargo surveyors during the first 10 days in August.

According to Intertek Testing Services and AmSpec Agri Malaysia respectively, the exports of palm oil products from Malaysia for August 1-10 increased by 23.3%.

Dalian's palm oil contract, which is the most active contract in Dalian, gained 1.37% while soyoil prices rose by 1.37%. Chicago Board of Trade soyoil prices were up by 0.15%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.

Six dealers said that India's imports of soyoil are expected to increase 60% in the next year, reaching a new record high by 2024/25. This is due to refiners increasing purchases because palm oil costs less, and shipments are likely to reach a five-year-low.

Dealers said that palm oil imports are expected to drop 13.5% compared to a year earlier, to 7,8 million tons. This is the lowest level since 2019/20.

The oil prices were stable on Wednesday, as investors awaited more accurate data from the U.S. inventories and awaited upcoming talks between U.S. president Donald Trump and Russian president Vladimir Putin.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The palm's trade currency, the ringgit, has strengthened by 0.26% in relation to the dollar. This makes the commodity more costly for buyers who hold foreign currencies.

Technical analyst Wang Tao stated that the price of palm oil FCPOc3 could retrace into a range between 4,388-4400 ringgits per ton as it is facing strong resistance at 4,455 ringsgit.

(source: Reuters)