Short covering and bargain buying boost the price of VEGOILS - Palm
The price of Malaysian palm oil futures rose on Tuesday after two sessions of declines, with bargain buyers and short-covering activities providing additional support.
The benchmark contract for palm oil delivery in October on the Bursa Derivatives Exchange in Malaysia rose 12 ringgit or 0.28% to 4,254 Ringgit ($1,005.44) per metric ton.
A Kuala Lumpur based trader reported that bargain buyers lifted crude palm futures prices into positive territory by the close of the session.
The trader said that it could be possible that short coverings is driving up the market.
Dalian's palm oil contract, which is the most active contract, rose by 0.61%. Chicago Board of Trade soyoil prices were down by 0.11%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
The oil prices rose on the optimism that a US-Russia trade war was easing and President Donald Trump increased pressure on Russia for its war in Ukraine.
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 0.07%, making it slightly cheaper for foreign buyers.
(source: Reuters)
