VEGOILS - Palm up on Chicago soyoil's strong performance; weather concerns and weak export data cap gains
The market was supported by a stronger Chicago soyoil and concerns about inclement weather, but a lackluster November export report and the looming threat of bad weather weighed heavily on the market.
At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for January delivery gained 65 ringgit or 1.58% to 4,177 Ringgit ($988.87).
According to Paramalingam Supramaniam of Selangor brokerage Pelindung Bestari, the uptrend in Chicago Soyoil Prices is helping sustain the palm Market. However, traders are also squareing off their positions before a weather alert,
Supramaniam noted that the weaker November preliminary export numbers and a strengthening ringgit were causing headwinds.
The Malaysian Meteorological Department has stated that the northeast monsoon will arrive on Thursday, and last until March 2026. It will cover the east coast of Peninsular Malaysia, Sabah, and Sarawak. Flooding could occur near rivers and low lying areas due to continuous rainfall.
The cargo surveyors estimate that Malaysian palm products exports between November 1-10 dropped between 9.5% to 12.3% from the same period one month earlier.
Dalian's palm oil contract, which is the most active contract in Dalian, increased by 1.34%. Chicago Board of Trade soyoil prices were up by 0.32%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
The palm ringgit MYR= strengthened by 0.22% against dollars, increasing the price of the commodity for holders of foreign currencies.
Early Asian trade saw oil prices drop, erasing gains made in the previous session. Oversupply worries outweighed optimism about a possible resolution to the U.S. Government Shutdown.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
Technical analyst Wang Tao predicted that palm oil would retest the resistance level of 4,152 ringgits per metric ton. A break above this could trigger a rise into the range 4,174 to 4,196 ringgits, Wang Tao added.
(source: Reuters)
