SINGAPORE: Malaysian palm oil futures firmed on Thursday for the second straight session, underpinned by tighter inventories and bargain buying after the contract touched a more than seven-month low in the previous session.
Palm flat as firmer crude counters weaker rival oils, exports
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange rose 10 ringgit, or 0.27%, to 3,733 ringgit ($842.66) a metric ton as of 0235 GMT.
Fundamentals
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Palm oil and soyoil imports in India, the world’s top importer of vegetable oils, climbed to near one-highs in July, as refiners increased purchases for upcoming festivals amid a correction in prices, the Solvent Extractors’ Association of India (SEA) said on Wednesday.
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Malaysia’s palm oil stocks at the end of July fell 5.35% from the previous month to 1.73 million metric tons, the lowest since March, the Malaysian Palm Oil Board (MPOB) said on Monday.
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Dalian’s most-active soyoil contract gained 0.96% after falling for three consecutive sessions, while its palm oil contract strengthened 1.05%. Soyoil prices on the Chicago Board of Trade ticked up 0.15%.
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Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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The Malaysian ringgit, palm’s currency of trade, weakened 0.34% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.
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Oil prices rose, recovering some of the previous day’s loss, on hopes of potential US interest rate cuts boosting economic activity and fuel demand, though lingering concerns over slower global demand capped gains.
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Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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Palm oil may edge up to resistance at 3,764 ringgit per metric ton, where a wave 4 peaked, said Reuters technical analyst Wang Tao.
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