Palm gains strength over soyoil at Dalian, Chicago
Malaysian palm oils futures continued to rise on Monday, following the strength of rival soyoil in Dalian and Chicago.
By midday, the benchmark contract for palm oil delivery in March on the Bursa Derivatives exchange rose by 93 ringgit or 2.12% to $4,484 ringgit (US$994.90) per metric ton.
A Kuala Lumpur trader stated that the market today is monitoring external performance of Dalian soyoil and Chicago soyoil.
Dalian's palm oil contract also rose by 2.43%, while the most active soyoil contract increased by 2.44%. Chicago Board of Trade soyoil prices rose 1.1%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.
China's soybean meal and oil futures posted their largest daily gain since 2023, while rapeseed and palm oil contracts also rose, following a rally that occurred in the Chicago Soy Complex after the release bullish USDA crop report.
Last Friday, the U.S. Department of Agriculture projected lower than expected U.S. soy production and reduced its soy ending stock due to a dry growing season. This sent Chicago soybean and oil prices to multi-month-highs.
Malaysian palm oil stocks fell for the third consecutive month in December. They dropped 6.91%, to 1.71 millions metric tons. Crude palm oil production also declined 8.3%, and exports plummeted 9.97%.
According to cargo surveyors, Malaysian palm oil exports dropped between 21.4% and 26.68% from January 1-10.
Brent crude oil prices rose for the third consecutive session on Monday. Brent reached its highest level in over four months as a result of U.S. sanctions that are expected to impact Russian crude exports destined to major buyers China and India.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The Malaysian Ringgit, the palm industry's trade currency, dropped 0.31% in relation to the U.S. Dollar, making the commodity more affordable for buyers who hold foreign currencies.
According to Wang Tao, a technical analyst, palm oil prices are expected to increase to 4,646 ringgit a metric ton. This is the peak of wave B. ($1 = 4.5070 ringgit)
(source: Reuters)
