Palm extends gains on Indonesia output risks, softer ringgit

KUALA LUMPUR: Malaysian palm oil futures inched higher on Monday for a third straight session on a softer ringgit and bullish forecasts from leading industry analysts.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 13 ringgit, or 0.31%, to 4,158 ringgit ($1,002.89) a metric ton at the midday break.

The contract is seeing support following bullish presentations at the Indonesia Palm Oil Conference last week, a Kuala Lumpur-based trader said.

Analysts flagged that palm oil prices may increase in the coming months on uncertainties stemming from land seizure policies and a biodiesel plan by top producer Indonesia.

Meanwhile the ringgit, palm’s currency of trade, weakened 0.41% against the dollar, making the commodity cheaper for buyers holding foreign currencies.

Dalian’s most-active soyoil contract rose 0.14%, while its palm oil contract gained 0.25%.

Soyoil prices on the Chicago Board of Trade were up 0.22%. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Cargo surveyor Intertek Testing Services (ITS) estimated that exports of Malaysian palm oil products for November 1-15 fell 15.5% from a month earlier, while AmSpec Agri Malaysia’s export estimates are expected later in the day.

Oil prices fell in early Asian trade, erasing last week’s gains, as loadings resumed at the key Russian export hub of Novorossiysk after a two-day suspension at the Black Sea port that had been hit by a Ukrainian attack.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

Palm oil may retest resistance at 4,145 ringgit per ton, a break above which could lead to a gain into the 4,171-4,213 ringgit range, Reuters technical analyst Wang Tao said.