Palm oil prices rise on the back of strong crude oil
Malaysian palm futures closed higher on Monday, as stronger crude oil supported the market after it had surpassed rival edible oils in earlier sessions.
The benchmark palm-oil contract for September delivery at the Bursa Derivatives Exchange rose 8 ringgit (0.2%), to 4,070 Ringgit ($962.17) per metric ton, as of closing.
A Kuala Lumpur based trader stated that "Crude trading is higher compared to Asia Morning Time, which lifts Chicago soybean oil. Thus, Malaysian palm oil follows suit."
Oil recovered on Monday, as a tight oil market helped offset the effect of OPEC+ increasing oil production more than expected in august. Also, concerns about the possible impact of U.S. Tariffs on the economic growth and demand for oil were also at play.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Dalian's palm oil contract, which is the most active contract, fell by 0.31%. Chicago Board of Trade soyoil prices fell 0.59%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
The palm ringgit's trade currency, the dollar, fell by 0.28%, making the commodity more affordable for buyers who hold foreign currencies.
Technical analyst Wang Tao stated that palm oil prices may drop to a range of 4,008 to 4,032 Ringgit per metric tonne, after completing a five-wave cycles from 3,947 Ringgit.
(source: Reuters)
