Palm gains on short-term supply, but much-anticipated first-quarter outlook
After two sessions of declining prices, Malaysian palm futures rose Wednesday on the back of an expected increase in supply for next year, and on short-term demand.
At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for January delivery gained 75 ringgit or 1.77% to 4,314 Ringgit ($1,005.13) per metric ton.
The contract has lost 1.89% over the last two sessions.
The price of palm oil has increased today, due to an anticipated increase in supply for the first quarter 2025, and a sustained short-term market demand, according to Marcello Cultrera. He is a grains oilseeds softs broker with SSY Global.
David Mielke, senior analyst at Oil World, predicted earlier this month that palm oil production would increase by 2.3 millions metric tons between 2024-25 and the previous season.
Dalian's palm oil contract, which is the most active contract in Dalian, gained 1.78% while soyoil rose 1.37%. Chicago Board of Trade soyoil prices were up by 0.33%.
As they compete to gain a share in the global vegetable oil market, palm oil monitors prices of competing edible oils.
Early Asian trading saw oil prices rise on the back of continued uncertainty about the Middle East conflict. This week, oil had fallen as much as $5 to its lowest level since early October due to demand concerns.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Palm's trade currency, the ringgit, has strengthened by 0.3% against U.S. dollars, increasing the price of the commodity for buyers with foreign currencies.
Exports of Malaysian Palm Oil Products rose between 14 and 15 % from Oct. 1-15 compared to the same period last month.
Technical analyst Wang Tao stated that palm oil could bounce up to 4,346 Ringgit per metric tonne, since it has managed to hover near a rising trendline.
(source: Reuters)
