Palm oil surpasses rival Dalian and Chicago oils are higher

Malaysian palm oils futures climbed a little higher on Wednesday, after three consecutive sessions of declines, as they tracked the strength in Dalian & Chicago soy oil, and market participants were awaiting cargo surveyor export data for further direction.

By midday, the benchmark contract for palm oil delivery in May on the Bursa Derivatives exchange had gained 19 ringgit or 0.47% to 4,072 Ringgit ($1,046.79) per metric ton.

A Kuala Lumpur based trader said, "Palm follows mostly stronger external?markets. There is also some bargain-buying due to recent losses."

The trader stated that the ringgit was trading near a high, and the gains were capped. He added that the market was awaiting the export data for February 1-25, which might be weaker.

The palm ringgit was unchanged in relation to the dollar, but it hovered at its highest level since April 2018.

Dalian's soyoil contract that is most active rose by 1.25% while palm oil contract fell by 0.72%. Chicago Board of Trade soy oil prices increased by 0.46%.

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

Chicago soybeans have gained more ground. They are now trading at a level that is close to the three-month high achieved earlier this week. This was due to optimism about Chinese demand. Beijing's comments also eased some concerns regarding?U.S. Tariff policy.

Investors are still worried about the possibility of a military conflict between Iran and the U.S., which could disrupt the supply.

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

As it broke a support level of 4,064 Ringgit, palm oil could retrace back to 3,999 Ringgit per ton.

(source: Reuters)