JAKARTA: Malaysian palm oil futures gained on Tuesday, snapping three consecutive sessions of losses, underpinned by strength in crude oil and Chicago soyoil, while a weaker ringgit also lent support.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 1.15% to 4,233 ringgit ($944.87) a metric ton by midday break.
The contract regained some of the 7.35% of loss posted over the three previous sessions on fears of a widening global trade war.
Palm oil mirrored the rebound in the energy market and US soyoil prices - oil prices rose more than 1%, and soyoil prices on the Chicago Board of Trade (CBOT) gained 0.90%.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil also tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
However, palm oil “may struggle to stay upbeat on weak fundamental factors”, a Kuala Lumpur-based trader said, noting the expectation of a higher stock level in March.
Malaysia’s palm oil stocks likely rose for the first time in six months in March as production recovered, a Reuters survey showed on Friday, although global demand remains sluggish amid tariff concerns.
Meanwhile, Dalian’s most-active soyoil contract fell 0.83%, while its palm oil contract slipped 0.57%.
Malaysian palm oil extends losses
The ringgit, palm’s currency of trade, hovered near its weakest level over two months against the US dollar, making the commodity cheaper for buyers holding foreign currencies.
Palm oil may retest resistance at 4,269 ringgit per metric ton, a break above which could lead to a gain into the 4,323-4,362 ringgit range.
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