Palm oil rises due to short covering and Dalian oils that are stronger

The price of Malaysian palm oils futures increased on Wednesday, for the fourth consecutive session. This was due to traders covering short positions and Dalian oil's strength providing additional support.

At midday, the benchmark contract for palm oil delivery in August on the Bursa Derivatives Exchange rose 25 ringgit (0.65%) to 3,893 Ringgit ($917.73).

Anilkumar bagani, research director of Mumbai-based vegetable oils broker Sunvin Group, stated that crude palm oil futures continued to trade higher as a result of the short covering observed on Tuesday, and the strength in the Chinese market for vegetable oils.

Bagani said that the ringgit was stable and that soyoil prices in North America and South America did not provide any direction.

Dalian's palm oil contract, which is the most active contract in Dalian, increased by 0.95%. Chicago Board of Trade soyoil prices were up by 0.04%.

As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.

Early trading saw oil prices rise as the U.S. banned Chevron's export of crude from Venezuela due to a new authorization on its assets in Venezuela, indicating a tighter supply.

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

The palm ringgit's trade currency, the dollar, has weakened by 0.17%, making it slightly cheaper for foreign buyers.

Data published by the European Commission showed that the European Union's soybean imports, which began the season in July 2024/25, had reached 12,69 million metric tonnes by May 25. This was up 7% compared to the same period last year, and palm oil imports, at 2,57 million tons, were down 19%.

Technical analyst Wang Tao stated that palm oil could retrace to a range between 3,814 and 3,838 ringgit for a metric ton as it faces strong opposition at 3,878.

(source: Reuters)