KUALA LUMPUR: Malaysian palm oil futures rose on Thursday, extending gains to a seventh session on the back of strength in Dalian oils and a weaker ringgit.
Palm oil extends winning run on output concerns
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 63 ringgit, or 1.56%, to 4,106 ringgit ($992.75) a metric ton in early trade.
Fundamentals
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Dalian’s most-active soyoil contract rose 1.48%, while its palm oil contract added 2.2%. Soyoil prices on the Chicago Board of Trade fell 0.09%.
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Palm oil tracks price movements in rival edible oils, as they compete for a share of the global vegetable oils market.
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The ringgit, palm’s currency of trade, fell 0.31% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
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Oil prices were little changed after falling in the previous session, as signs of higher fuel demand and falling stockpiles in the United States, the world’s biggest oil user, offset concerns over demand elsewhere, particularly in China.
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Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
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Indonesia’s palm oil stocks fell 10.82% in July from the month before to a five-year low of 2.51 million metric tons, as domestic demand for biodiesel increased and production fell, data from Indonesian palm oil association GAPKI showed on Wednesday.
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Palm oil may test resistance at 4,120 ringgit per ton, a break above which could open the way towards the 4,153 ringgit to 4,206 ringgit range, Reuters technical analyst Wang Tao said.
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