Palm oil prices rise on stronger crude oil and strong exports
Malaysian palm futures rose on Tuesday as the market recovered its losses from the previous session. This was due to a combination of a stronger crude oil price and strong export momentum.
By midday, the benchmark palm oil "contract" for June delivery at the Bursa Derivatives exchange had gained 39 ringgit or 0.81% to 4,850 Ringgit ($1,201.98). It dropped 0.58% Monday.
Paramalingam Supramaniam is the director of Selangor brokerage Pelindung Bestari. He said that the market's direction continues to be determined by the crude oil price, despite the uncertainty surrounding the geopolitical conditions in the Middle East.
Supramaniam stated that the market will remain resilient if exports continue to move in the same direction they did in March, and existing stock levels are maintained.
A survey shows that Malaysian palm oil inventories dropped by the most in three years in March, to their lowest levels since July last year, due to a surge in exports, which more than offset an increase in production.
On April 10, the Malaysian Palm Oil Board will release its report on supply and demand.
Dalian's palm oil contract, which is the most active contract in Dalian, rose 0.34% and soyoil prices increased 0.85%. Chicago Board of Trade soyoil prices rose?0.39%.
As palm oil competes to gain a share in the global vegetable oils market, it tracks the price changes of its rival edible oils.
Oil prices continued to rise as a U.S. deadline loomed, requiring Iran to?open? the Strait of Hormuz by a certain date or face being "taken out". President Donald Trump threatened to order an attack on Iranian power plants and bridges.
Palm oil is a better option as a feedstock for biodiesel due to the stronger?crude futures.
The palm ringgit's currency has weakened by 0.25% compared to the dollar. This makes the commodity slightly more affordable for buyers who hold foreign currencies.
Technical analyst Wang Tao stated that palm oil prices are 'biased' to be in a range of 4,696 to 4,749 Ringgit per ton as the correction from 4,919 looks incomplete.
(source: Reuters)
