Palm rises with rival soyoil, market awaits key data on output and price projections

JAKARTA: Malaysian palm oil futures extended gains on Monday, supported by rival soyoil in Chicago and Dalian markets, while the market is awaiting data leads from the Malaysian Palm Oil Board (MPOB), and the Price Outlook Conference (POC).

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 30 ringgit, or 0.72%, to 4,184 ringgit ($1,063.01) a metric ton, by the midday break.

“Today’s market will follow Dalian lead until MPOB data tomorrow, and POC analysts’ outlook for further leads,” a Kuala Lumpur-based trader said.

Dalian’s most-active soyoil contract was up 0.17%, while its palm oil contract traded flat.

Soyoil prices on the Chicago Board of Trade rose 1.63%. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. The MPOB is scheduled to release its monthly data on February 10, while the POC is scheduled on February 9-11.

Malaysia’s palm oil inventories are set to end a 10-month rising streak in January, as exports jumped during a seasonal slowdown in production, a Reuters survey showed.

Oil prices fell 1% on Monday as immediate fears of a conflict in the Middle East eased after the US and Iran pledged to continue talks about Tehran’s nuclear programme over the weekend, calming investors anxious about supply disruptions.

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

The ringgit, palm’s currency of trade, strengthened 0.23% against the dollar, making the commodity more expensive for buyers holding foreign currencies.

Palm oil FCPOc3 may break a support at 4,148 ringgit per metric ton, and fall towards 4,083 ringgit, said Reuters technical analyst Wang Tao.