Palm oil prices rise ahead of Malaysian supply-demand report
Malaysian palm futures reversing previous losses, the market watched for official data on domestic demand and supply to provide further direction.
At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for December delivery was up 18 Ringgit (0.42%) to 4,289 Ringgit ($1,001.63) per metric ton.
The contract dropped as much as 1,80% in an earlier session due to weaker Dalian edible oil and a stronger Ringgit.
Malaysian palm futures rose on the expectation of weak output growth in Malaysia and low stock levels ahead of MPOB’s key crop report.
The Malaysian Palm Oil Board is expected to release its September supply-demand data on Thursday.
Dalian's palm oil contract, which is the most active contract, fell 1.4% while soyoil prices dropped 0.77%. Chicago Board of Trade soyoil prices were up by 1.04%.
As rival edible oils compete to gain a share of global vegetable oil market, palm oil monitors the price movement of their competitors.
The palm ringgit's trade currency strengthened by 0.07% against dollars, increasing the price of the commodity for buyers who hold foreign currencies.
In Asian trading, oil prices were stable as traders considered the Middle East conflict and continued expectations of low demand.
Brent crude futures rose around 0.8% by 0535 GMT. Palm oil is more attractive as a biodiesel feedstock due to the stronger crude oil futures.
A leading industry analyst has said that the implementation of higher biodiesel requirements in Indonesia, which is the world's largest palm oil producer will likely lead to a tightening of supplies of vegetable oil.
Industry groups and traders have said that companies that paid to source agricultural products that comply with the European Union’s anti-deforestation legislation would lose out if it decides to defer the implementation of the law by an year.
Technical analyst Wang Tao stated that palm oil could extend its loss to a range between 4,119 and 4,152 ringgits per ton as the uptrend since the low of 3,987 on Sept. 30 has reversed.
(source: Reuters)
