VEGOILS - Palm rises with short-covering. Firmer palm olein. Chicago soyoil.
The price of Malaysian palm oils futures increased on Wednesday. This was due to traders covering their shorts and the strength of Dalian palm olein, Chicago soyoil, and Dalian palm olein.
At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for October delivery gained 66 Ringgit or 1.55% to 4,330 Ringgit ($1,025.09) per metric ton.
A Kuala Lumpur trader reported that the strength in Dalian palm olein markets and Chicago soyoil spilled into crude palm futures during this session.
The rally in Dalian was driven both by short-covering as well as technical buying.
The benchmark crude palm oil futures reached a high of 4,334 Ringgit at midday. Short-covering is likely to occur after prices break above the 4,300 ringgit level.
Dalian's palm oil contract grew by 1.59%, while the most active soyoil contract increased by 0.3%. Chicago Board of Trade soyoil prices rose 0.79%.
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 in Asian trade, after three sessions of consecutive declines. A U.S.-Japan trade agreement signaled progress on tariffs. However, gains were limited by the fading hope for a breakthrough during an EU and China summit.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Palm's trade currency, the ringgit, has strengthened by 0.12% against the US dollar, causing the price of the product to increase for foreign currency buyers.
By July 20, the European Union's soybean imports, which began on July 1, 2025-26, had fallen by 32% compared to last year. According to European Commission data, palm oil imports dropped 53% on an annual basis to 93.234 million tonnes.
Technical analyst Wang Tao stated that palm oil could retest its support level of 4,198 ringgit for a metric ton. A break below this mark would open the door towards 4,150 ringgit. ($1 = 4.2240 ringgit)
(source: Reuters)
