JAKARTA: Malaysian palm oil futures rose on Tuesday, after five straight sessions of decline, supported by strength in Chicago soyoil and the focus shifting to the production outlook for May.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange gained 6 ringgit, or 0.16%, to 3,833 ringgit ($906.79) a metric ton by the midday break.
“The futures opened gap lower but (were) seen recovering steadily as the prices have been almost fully traded for the high production gain scenario during April month, and the focus is now on May month performance,” said Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group.
Dalian’s most-active soyoil contract fell 0.21%, while its palm oil contract shed 0.89%. Soyoil prices on the Chicago Board of Trade were up 0.33%. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
The ringgit, the palm’s currency of trade, weakened 0.79% against the US dollar, making the commodity cheaper for buyers holding foreign currencies.
Malaysian palm oil falls on firmer ringgit, weak crude, Chicago soyoil
Oil prices rebounded over 1% on Tuesday with technical rebound and dip-buying after a drop in the prior session due to the OPEC+ decision to accelerate increases in output, although concerns about the market surplus outlook persisted.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil may retest support at 3,765 ringgit per metric ton, a break below which could open the way toward 3,702 ringgit, according to Reuters’ technical analyst Wang Tao.
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