Palm oil rises with stronger Chicago soyoil

The price of palm oil in Malaysia rose for the fourth consecutive session on Tuesday. This was due to higher soyoil futures prices in Chicago after China bought American soybeans.

At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for January delivery gained 33 ringgit or 0.79% to 4,184 Ringgit ($1,002.16) per metric ton.

David Ng, a proprietary trading at Kuala Lumpur's Iceberg X Sdn. Bhd., explained that the contract tracked gains on the Chicago soyoil markets today.

Two traders who were familiar with the transactions said that China purchased at least 14 cargoes (cartons) of U.S. soya beans on Monday. This was its largest purchase at least since January, and the biggest since the October summit between President Donald Trump, and President Xi Jinping.

Dalian's palm oil contract rose 0.35%, while the most active soyoil contract increased 0.6%. 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.

Prices of oil fell as traders assessed the impact of Western sanctions against Russian oil flows.

Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

Palm's trade currency, the ringgit (dollar), has weakened by 0.65%, making it cheaper for buyers who hold foreign currencies.

According to a circular posted on the Malaysian Palm Oil Board's website, Malaysia has reduced its crude palm oil price reference for December at a level which maintains the 10% export duty.

Technical analyst Wang Tao stated that palm oil could break through resistance at 4,171 Ringgit per metric tonne and move into a range of 4,213 to 4,238 Ringgit.

(source: Reuters)