Palm tracks Chicago soyoil to break four-day losing streak

The price of Malaysian palm oils futures increased on Wednesday, after four consecutive sessions of declines. This was due to higher prices for Chicago soyoil as well as Dalian palm oil.

By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for February delivery had gained 50 ringgit or 1.25% to 4,040 Ringgit ($977.73), a metric tonne. In the previous session, the contract hit its lowest level since July 2.

A Kuala Lumpur based trader said that the price of Bursa Malaysia CPO futures experienced a technical recovery after yesterday's steep fall. He added that Dalian palm oil was recovering and Chicago soyoil was strengthening.

Dalian's palm oil contract, which is the most active contract in Dalian, gained 0.26%. Chicago Board of Trade soyoil prices were up 0.65%.

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

According to AmSpec Agri, an independent inspection company, and Intertek Testing Services cargo surveyors, the exports of Malaysian products containing palm oil for the period November 1-22 were down 16.4% to 18.8% compared with a month ago.

The oil prices rose slightly on Wednesday after falling to a one-month low in the previous session. This was due to signs that Ukraine and Russia are close to a deal that will likely result in the lifting of the international sanctions against Russian supplies.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger. (Reporting and editing by Subhranshu sahu; Bernadette christina)

(source: Reuters)