Palm oil prices rise on weaker crude production and higher crude oil prices
Malaysian palm oil futures rose on Tuesday as a result of the sharp rise in crude prices. Weakened Malaysian production prospects, and a declining ringgit also helped.
By midday, the benchmark palm oil contract for August delivery at the 'Bursa Malaysia Derivatives Exchange' had gained 21 ringgit (0.47%) to 4,494 Ringgit ($1,133.99).
The futures opened higher after sharp gains in crude prices from their early lows. Also, the Malaysian palm production prospects for May month were weaker, and the Malaysian ringgit was weaker, said Anilkumar bagani, commodity head at Mumbai's Sunvin Group.
The market will be closed on Wednesday for Eid al-Adha.
Dalian's soyoil most active contract fell 0.17% while palm oil gained 0.51%. Chicago Board of Trade soyoil prices were down by 0.89%.
As palm oil competes to gain a piece of the global vegetable oils market, it tracks price movements of competing edible oils.
According to AmSpec Agri Malaysia, and Intertek Testing Services (inspection firms), Malaysian palm oils exports between May 1-25 were down 18.0% and 14.5 %, respectively, compared with April 1-25.
Brent crude futures jumped over 2% on Tuesday in Asian trading after the U.S. Military carried out strikes against Iran. This kept markets on edge as a deal ending the war and opening up the Strait of Hormuz was elusive.
The palm oil price is more attractive as a feedstock for biodiesel due to the stronger crude oil futures.
Palm's currency, the ringgit (the?trade currency), has weakened by?0.35% versus the dollar. This makes the commodity slightly more affordable for buyers who hold foreign currencies.
According to the Indonesian Palm Oil Association (GAPKI) and its data released on Monday, Indonesia exported 2,17 million metric tonnes of palm oil in March. This is down from 2,88 million metric tonnes during the same period last year.
According to Wang Tao, a technical analyst, palm?oil could climb to a range of 4,543 to 4,584 Ringgit per metric tonne, after it cleared the resistance level at 4,502 Ringgit.
(source: Reuters)
