SINGAPORE: Malaysian palm oil futures extended gains on Tuesday amid higher crude oil prices, although a stronger ringgit capped gains.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 14 ringgit, or 0.33% to 4,261 ringgit ($903.33) a metric ton in morning trade, as of 0234 GMT.
Declining Indonesian palm oil exports may affect domestic supply, officials say
It had gained 0.64% during overnight trade.
Fundamentals
- Dalian’s most-active soyoil contract rose 0.38%, while its palm oil contract was up 0.34%. Soyoil prices on the Chicago Board of Trade dipped 0.14%.
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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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Oil prices were on track to gain for a second straight day, after settling up more than a dollar on expectations of tighter supply driven by Russian production cuts and attacks on Russian refineries.
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Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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The Malaysian ringgit, palm’s currency of trade, strengthened 0.13% against the dollar. A stronger ringgit makes palm oil less attractive for foreign currency holders.
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Palm oil may continue to rise towards the resistance levels of RM4,400-4,420 per ton this week, with supports at RM3,980-4,000 per ton, LSEG Agriculture Research said in its weekly report published on Monday.
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Palm oil may revisit its March 21 high of 4,314 ringgit per ton, as its strong gain on Monday suggests a continuation of the uptrend, said Reuters technical analyst Wang Tao.
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