Palm rises on stronger soyoil, positive export demand

KUALA LUMPUR: Malaysian palm oil futures rose for a second straight session on Thursday, supported by stronger soyoil and robust demand from key export markets.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained 50 ringgit, or 1.14%, to 4,438 ringgit ($1,055.91) a metric ton by the midday break.

Crude palm oil traded higher on overnight strength in the soybean oil market, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.

“The recent strong export performance also lifted market sentiment. We see prices supported above 4,400 ringgit and resistance at 4,550 ringgit,” he said.

Cargo surveyors had estimated that exports of Malaysian palm oil products for September rose between 7.3% and 9.6% from a month earlier.

Soyoil prices on the Chicago Board of Trade were up 0.28%.

The Dalian Commodity Exchange is closed from October 1 to 8 for holidays.

Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Oil prices rose after losses in previous three sessions due to market oversupply concerns, as the potential for tighter sanctions on Russian crude lent some support.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, strengthened 0.05% against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.

Indonesia exported 16.20 million tons of crude and refined palm oil over the January to August period, up 13.56% from the same period last year, the statistics bureau said.

Palm oil may bounce into a range of 4,429 ringgit to 4,457 ringgit per ton, as it has broken resistance at 4,401 ringgit, Reuters technical analyst Wang Tao said.