Palm oil range bound, supported by crude and capped by Ringgit

Malaysian palm oil futures were rangebound Wednesday, following mixed movements in edible oils at Dalian, Chicago and Dalian, as higher crude oil prices provided a boost, while a stronger Malaysian ringgit limited gains.

By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for July delivery fell by 2 ringgit or 0.04% to 4,534 Ringgit ($1,148.43).

The futures are unchanged at midday. They're stuck between supportive and counter-productive cues. "External markets have been mixed, but are improving. Crude oil is holding firmer, and offers?some support, with a stronger Ringgit capping the upside," said Kang Wei Cheng, a Singapore-based analyst at?StoneX.

Dalian's soyoil contract with the highest volume of activity rose by 0.25% while palm oil contracts fell by 0.21%. Prices of soyoil on the Chicago Board of Trade dropped by 0.1%.

As palm oil competes for a piece of the global vegetable oil market, it tracks rival edible oils.

The palm ringgit's trade currency firmed by 0.03% against dollar, making it marginally more expensive for buyers who hold foreign currencies.

Exports of Malaysian Palm Oil Products for the period April 1-25 were estimated to be down between 15.7% and 16.8% compared to a month ago by cargo surveyors.

Seger Budiarjo, the director of Agrinas Palma Nusantara, said that Indonesia's palm oil state company Agrinas Palma Nusantara is expecting its crude palm oil production?in 2026?to reach 2 million tons. This will be nearly twice its?previous estimation?of 1,07 million tons.

The oil prices continued to rise on Wednesday after reports that the U.S. would extend its blockade against Iranian ports. This could potentially prolong supply disruptions in the Middle East.

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

Technical analyst Wang Tao stated that palm oil could?test the support at 4,475 Ringgit per ton. A break below this level would open up the possibility of a range between 4,408-4440 ringgit.

(source: Reuters)