VEGOILS - Palm oil gains over Chicago soyoil; inventory data to be released
After two sessions of losses on the Chicago Soyoil Market, the Malaysian Palm Oil Board's futures prices rose on Wednesday.
By midday, the benchmark contract for palm oil delivery in May on the Bursa Derivatives exchange was up 21 Ringgit or 0.48% to 4,370 Ringgit ($983.13) per metric ton.
A Kuala Lumpur trader stated that "the futures will attempt to recover some yesterday's loss before resuming their direction, while waiting for the MPOB data next Monday."
On March 10, the Malaysian Palm Oil Board will release its monthly statistics.
The Chicago Board of Trade's (CBOT), which trades soyoil, rose by 0.58%. Dalian's palm oil contract, however, fell 1.16 % and its most active contract, a contract for Dalian’s most active contract, lost 1.3%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
A survey shows that Malaysian palm oil inventories will fall to their lowest level in almost three years in February due to production disruptions brought on by flooding.
China quickly retaliated to fresh U.S. Tariffs imposed Tuesday by raising import levies on $21 billion of American agricultural products and food, moving the two world's largest economies closer to a full-blown trade war.
According to dealers, India's palm-oil imports increased 36% month-on-month in February, after dropping to their lowest level since March 2011, in January.
Investor sentiment was hammered by the third consecutive session of falling oil prices on Wednesday, as major producers announced plans to increase production in April. This combined with fears that U.S. Tariffs on Canada Mexico and China would slow down economic growth and fuel demand growth.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
The palm ringgit's currency has strengthened by 0.36% compared to the U.S. Dollar, making it slightly more expensive for foreign buyers.
Technical analyst Wang Tao stated that palm oil could fall between 4,183 and 4,264 ringgits per metric tonne, since it has lost support at 4,360.
(source: Reuters)
