KUALA LUMPUR: Malaysian palm oil futures traded in a tight range on Thursday, as strength in rival Dalian oils provided support while weakness in crude oil and Chicago soyoil limited the gains.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 12 ringgit, or 0.3%, to 4,074 ringgit ($965.17) a metric ton at the midday break.
The contract rose 2.37% on Wednesday.
Crude palm oil futures were seen trading sideways as bullish momentum in Chinese vegetable oils during Asian hours supported the market, said Anilkumar Bagani, research head at Mumbai-based vegetable oil broker Sunvin Group.
However, a downward push in Chicago soyoil futures and a slide in energy prices capped the gains, he added. Dalian’s most-active soyoil contract rose 0.28%, while its palm oil contract added 1.12%.
Soyoil prices on the Chicago Board of Trade (CBOT) fell 0.93%. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Malaysian palm oil higher on better demand
Oil prices eased, reversing Wednesday’s gains, on concerns over weak US demand after government data showed a surprise stock buildup in the world’s biggest crude consumer. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.12% against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.
Palm oil may extend gains to 4,133 ringgit per metric ton, as suggested by a projection analysis, Reuters technical analyst Wang Tao said.
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