Malaysian palm oil futures rose for a third straight session on Tuesday and hit their highest levels in more than five months, underpinned by stronger rival Dalian edible oils and a softer ringgit, although weaker crude prices kept a lid on the gains.
The benchmark palm oil contract FCPO1! for November delivery on the Bursa Malaysia Derivatives Exchange gained 48 ringgit, or 1.05%, to 4,607 ringgit ($1,090.41) a metric ton by the midday break.
The contract tracked Dalian vegetable oils higher, while lingering weakness in the Malaysian ringgit also lent support, Kuala Lumpur-based traders said.
Dalian’s palm oil contract CPO1! rose 1.17%, while its most-active soyoil contract (DBYcv1) climbed 0.19%. Soyoil on the Chicago Board of Trade (CBOT) ZL1! fell 0.28%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
The ringgit USDMYR, palm’s currency of trade, weakened 0.09% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Also supporting the market, cargo surveyors estimated palm oil exports during August 1-15 likely rose between 16.5% and 21.3% from a month earlier.
Oil prices slipped as market participants contemplated the planned three-way talks among Russia, Ukraine and the United States to end the war in Ukraine, which could lead to lifting of sanctions on Russian crude.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Palm oil may retrace toward 4,542 ringgit per ton as suggested by its wave pattern and a rising trendline, Reuters technical analyst Wang Tao said.
Source: Reuters
