Palm oil rises in line with stronger Dalian soyoil
Malaysian palm futures climbed on Monday, ending a six session losing streak. The rebound in Dalian soybean oil prices, and traders buying cheaper contracts following the recent declines, were behind this rise.
By midday, the benchmark contract for palm oil delivery in March on the Bursa Derivatives exchange was up 56 Ringgit or 1.26% at $4,489 Ringgit ($1,000.45).
Anilkumar bagani, commodity researcher at Sunvin, said that crude palm oil prices were higher because investors snapped up cheaper contracts following recent price declines.
Dalian's soyoil contract with the highest volume of trading rose by 0.83% while palm oil contracts fell by 0.48%. Chicago Board of Trade soyoil was down by 0.2%. Rapeseed futures at the Zhengzhou Commodity Exchange increased by 0.86%.
As palm oil competes to gain a share of the global vegetable oil market, it tracks the price movement of competing edible oils.
Indonesia announced that it would raise its export levy on crude palm oil from 7.5% to 10% to fund higher biodiesel subsides.
Bagani added that "the news of Indonesia increasing its export levies as well as launching B40 biodiesel from January 1 has provided some support for the bullish cause."
Oil prices and other risk assets rose on Monday after U.S. inflation data showed a cooling trend. This boosted hopes for further policy easing in the coming year, which will help support global economic growth.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency strengthened by 0.42% against dollars, increasing the price of the commodity for buyers who hold foreign currencies.
Technical analyst Wang Tao stated that palm oil could bounce between 4,527 and 4,624 ringgit for a metric ton as it stabilises around the support level of 4,370 ringgit.
(source: Reuters)
