Palm rises on gains at Dalian, good export and lower production data

JAKARTA: Malaysian palm oil futures extended gains to a second consecutive session on Tuesday, tracking a rise in rival edible oils at the Dalian exchange, with good export and lower production data also lending support to the market.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 10 ringgit, or 0.24%, to 4,235 ringgit ($1,072.15) a metric ton by the midday break.

“The market is tracking Dalian strength, good export and lower production to further sustain its rally,” a Kuala Lumpur-based trader said. Dalian’s most-active soyoil contract rose 0.54%, while its palm oil contract gained 2.09%.

Soyoil prices on the Chicago Board of Trade were down 0.56%.

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

Cargo surveyor Intertek Testing Services said Malaysian palm oil product exports for January 1-25 rose 9.97% compared to a month earlier, while independent inspection company AmSpec Agri Malaysia reported a 7.97% increase.

The ringgit, palm’s currency of trade, strengthened 0.33% against the dollar, making the commodity more expensive for buyers holding foreign currencies.

Oil prices fell on Tuesday even as a massive winter storm hit crude production and affected refineries on the US Gulf Coast.

Weaker crude oil futures make palm oil a less attractive biodiesel feedstock.

Palm oil FCPOc3 may retest a resistance at 4,272 ringgit per metric ton, a break above could lead to a gain into the $4,316 ringgit to 4,343 ringgit range, Reuters technical analyst Wang Tao said.