Products quoted in euros on the European vegetable oils market rallied on Thursday in response to a steep rise in the dollar after the US Federal Reserve raised interest rates and signaled that more increases would follow next year. EU rapeoil and soyaoil gained between 9 euros and 25 euros per tonne because of the dollar's rise.
A rally in rapeseed futures on technical buying, also sparked by dollar strength, and improved demand in rapeoil also supported prices. "The market was mostly directed by currencies. The dollar pushed euro-priced products up and products quoted in dollars came under pressure," one broker said.
"Palm oil was up because the ringgit also fell against the dollar and that makes the oil cheaper for foreign buyers and could boost export demand." Palm oil was mostly offered between $2.50 and $15 a tonne higher, tracking Malaysian palm oil futures, which closed between 39 ringgit and 66 ringgit a tonne up. The weak ringgit and concerns over tighter supply due to lower production also supported futures.
The strong dollar somewhat capped gains in the cash market. CBOT soyaoil futures were 0.01-0.08 cents per lb higher by 1730 GMT on follow-through technical buying triggered by strong US soyabean exports. Coconut oil continued to strengthen, tracking firmer palm oil and because of concerns over tight supply, with asking prices around $20 a tonne up from Wednesday. Palmkernel oil was quoted between flat and $10 a tonne down, pressured by the strong dollar.
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