VEGOILS-Palm oil up on higher Dalian prices, weak demand limits gains
SINGAPORE, Oct 27 (Reuters) – Malaysian palm oil rose for a third consecutive session on Friday, with strength in China’s edible oil market supporting prices, although lacklustre demand for the tropical product limited the upside potential in prices.
The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange closed up 15 ringgit, or 0.4%, to 3,777 ringgit a metric ton.
“Robust performance of the Dalian market has contributed to the upward trend,” said Lingam Supramaniam, director with vegetable oil brokerage Pelindung Bestari in Kuala Lumpur.
“The demand is however subdued. While refiners are attempting to secure bids, potential buyers are currently holding out for more favourable prices than what is typically seen in the market.”
The active pace of the U.S. harvest of soybeans added pressure on prices. Farmers had harvested three-quarters of their crop by Sunday, according to weekly data from the U.S. Department of Agriculture.
The figures, roughly in line with trade expectations, were ahead of the five-year average pace for each crop.
Soyoil prices on the Chicago Board of Trade BOcv1rose 1% and Dalian’s most-active soyoil contract DBYcv1added 1.3%, while its palm oil contract DCPcv1 was up 0.8%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysian palm oil product exports for Oct. 1-Oct. 25 fell between 1.1% and 3.1% from a month earlier, data from independent inspection company AmSpec Agri Malaysia and Intertek Testing Services showed on Wednesday.
Malaysia’s finance ministry will not abolish a windfall profit levy on the palm oil industry, state news agency Bernama reported.
Palm oil may test a support of 3,719 ringgit per metric ton, a break below which could be followed by a drop into the 3,643-3,681 ringgit range, said Reuters technical analyst Wang Tao. TECH/C
(Reporting by Ashley Fang; Editing by Eileen Soreng)
((ashley.fang@thomsonreuters.com;))
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