Malaysian palm oil futures closed higher for the second day in a row on Tuesday

According to David Ng, a trader at Iceberg X in Kuala Lumpur, palm oil prices closed higher amid stronger soybean oil. He also noted that expectations of inventory drawdowns in the coming weeks are also supporting prices. Ng believes crude palm oil prices could find support at 4,150 ringgit per tonne and face resistance at 4,300 ringgit per tonne.

Malaysian palm oil futures closed higher for the second consecutive day on Tuesday, following a rise in prices of competing edible oils on the Dalian Exchange, which was also supported by strong export data and lower production.

The benchmark FCPO1 palm oil contract for April delivery on Bursa Malaysia rose 33 ringgit, or 0.78%, to 4,258 ringgit (US$1,077.97) per metric tonne. “The market is tracking rising prices in Dalian, supported by stronger positions, strong exports, and lower production volumes,” said a Kuala Lumpur trader.

The most actively traded soybean oil contract in Dalian rose 1.03%, while the palm oil contract rose 2.67%. Soybean oil prices on the Chicago Mercantile Exchange rose 0.48%.

Palm oil prices are tracking those of competing edible oils as it competes for share in the global vegetable oil market.

According to cargo inspection company Intertek Testing Services, Malaysia’s palm oil exports from January 1 to January 25 increased 9.97% compared to the previous month, while independent inspection company AmSpec Agri Malaysia reported a 7.97% increase.

The ringgit strengthened 0.33% against the dollar, making the commodity more expensive for buyers holding foreign currency.

Crude oil prices fell slightly on Tuesday as investors watched the resumption of supplies from Kazakhstan. However, the decline was limited as a powerful winter storm hit oil production and refineries on the US Gulf Coast.

Lower oil futures prices make palm oil a less attractive feedstock for biodiesel production.

Tags: prices, palm oil