Palm up on rival oils; stronger ringgit, weaker crude oil caps gains
Malaysian palm oil futures rose by 1.75% on Friday, with the December contract reaching 4,307 ringgit ($1,005.60) per metric ton, driven by the strength of rival edible oils. However, gains were capped due to a stronger ringgit and weaker crude oil prices, which reduced palm oil’s appeal as biodiesel feedstock. Soyoil and palm oil prices on Dalian and Chicago exchanges also saw increases. Exports of Malaysian palm oil products rose significantly in early October, and technical indicators suggest a neutral range ahead.
KUALA LUMPUR: Malaysian palm oil futures opened higher on Friday, tracking the strength of rival edible oils, but a stronger ringgit and weaker crude oil prices capped its gains.
Malaysian palm oil slides on profit-taking
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 74 ringgit, or 1.75%, to 4,307 ringgit ($1,005.60) a metric ton during early trade. The contract has gained 0.07% for the week so far.
Fundamentals
- Dalian’s most-active soyoil contract rose 0.95%, while its palm oil contract climbed 1.31%. Soyoil prices on the Chicago Board of Trade were up 0.32%.
- Palm oil tracks the price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
- The ringgit, palm’s currency of trade, strengthened 0.14% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
- Oil eased on Friday after a rally the previous day, but prices remained set for a second straight weekly gain as investors weighed the impact of hurricane damage on US demand against any broad supply disruption if Israel attacks Iranian oil sites.
- Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
- Cargo surveyors estimate exports of Malaysian palm oil products rose between 13.6% and 18.9% during Oct. 1-10, compared with the same period a month ago.
- Palm oil looks neutral in a range of 4,206 ringgit to 4,293 ringgit per metric ton, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.
Source Link : https://www.brecorder.com/news/40326586/palm-up-on-rival-oils-stronger-ringgit-weaker-crude-oil-caps-gains
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