Palm oil prices rise for the fourth consecutive session as stronger competitors gain ground
Investors analyzed data from the Malaysia Palm Oil Board to determine whether or not they should buy futures of palm oil in Malaysia.
By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for September delivery was up 27 Ringgit (0.65%) to 4,184 Ringgit ($984.47) per metric ton.
"Malaysian Palm Oil Futures extended modest gains. Supported by technical momentum, a lower ringgit and strength in the related vegetable oil markets. Meanwhile, crude oil prices remained firm despite news about planned production increases," Darren Lim said, commodities strategist with brokerage Phillip Nova.
Dalian's palm oil contract, which is the most active contract, gained 0.12%. Chicago Board of Trade soyoil prices rose by 0.71%.
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 oil contract in Malaysia is likely to be capped by the fact that palm oil stocks in June were up 2.41% compared to the previous month, to 2.03 million metric tonnes due to a drop in exports. This was revealed on Thursday by the industry regulator.
Oil prices fell on Thursday, as market participants perceived that the latest tariff announcements made by U.S. president Donald Trump would threaten global economic growth.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
The palm ringgit's trade currency, the dollar, fell by 0.05%, making the commodity more affordable for buyers who hold foreign currencies.
According to Wang Tao, the price of palm oil FCPOc3 could retest the support level at 4,134 Ringgit per metric tonne. A break below this mark would open the door to the range between 4,096 and 4,115 Ringgit. $1 = 4.2500 Ringgit (Reporting and editing by Janane Venkatraman, Sonia Cheema).
(source: Reuters)
