Palmettos rise on Dalian strength and weaker ringgit, aiming for second weekly gain

The price of Malaysian palm oils futures increased on Friday, following a two session slide. They were also on course for a second consecutive weekly gain. This was due to the strength of Dalian and Chicago vegetables oils.

By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for February delivery rose 36 ringgit or 0.88% to 4,141 Ringgit ($1,007.54) per metric ton.

This week, the contract has increased by 0.65%.

Anilkumar Bagani of Sunvin Group in Mumbai, the commodity research head, said that "Bursa Malaysia crude Palm Oil futures traded higher today due to bargain buying, following a bullish rebound in Dalian palm oil futures, and expectations of a resumed Indian palm oil purchasing after washouts in some Soy oil shipment."

Dalian's palm oil contract, which is the most active contract, rose by 0.78 percent. Chicago Board of Trade soyoil prices rose 0.25%.

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

Four trade sources reported that Indian refiners had cancelled about 70,000 tonnes of crude soyoil due for delivery in December and January because rising global prices, coupled with a weaker Indian rupee, made the local soyoil more affordable than imports.

Bagani said that the gains in Malaysian palm futures were limited by the risks of increased Malaysian palm oils stocks at the end of November and lower Indonesian palm export taxes in December.

According to Wang Tao, a technical analyst, palm oil FCPOc3 could retest the resistance at 4,192 Ringgit per tonne as it has stabilized around support at 4,093 Ringgit.

(source: Reuters)