Palm oil prices ended trading four times higher

Kenanga Futures analysts noted in a note that palm oil prices closed higher, buoyed by significant gains in competing oils the previous day. They also noted that prices rose due to ongoing concerns about a slowdown in overall tropical oil production growth. Kenanga Futures sets support and resistance levels for the May futures contract at 3,990 ringgit per tonne and 4,085 ringgit per tonne, respectively.

Malaysian palm oil futures closed higher on Thursday, resuming trading after the two-day Lunar New Year holiday, buoyed by rising soybean oil and Chicago crude prices.

The benchmark FCPO1 palm oil contract for May delivery on Bursa Malaysia rose 101 ringgit, or 2.51%, to close at 4,117 ringgit (US$1,053.75) per metric tonne.

Crude palm oil futures rose on a positive note following a rally in the Chicago-based soybean oil and energy futures markets on Wednesday evening, with the contract essentially catching up with the price movements of vegetable oils seen in their respective markets during the Malaysian holidays, said Anilkumar Bagani, head of commodity research at Mumbai-based Sunvin Group.

Bagani said the absence of Chinese markets and weak export demand are limiting the palm oil market’s recovery.

The Dalian Commodity Exchange is closed for the Lunar New Year holiday and will resume trading on February 24.

According to Bagani, the market expects palm oil harvesting to begin in early February, ahead of Ramadan.

“This could prevent a significant drawdown in Malaysian palm oil inventories at the end of February unless export performance begins to improve.”

Cargo assessors are expected to release their forecasts for Malaysian palm product exports for the period February 1-20 on Friday.

Soybean oil prices on the Chicago Mercantile Exchange rose 0.05%. Palm oil prices follow those of competing edible oils as it competes for share in the global vegetable oil market.

Oil prices rose amid growing concerns about a potential military conflict between the United States and Iran, as both countries have stepped up military activity in the oil-producing region.

Higher oil futures prices make palm oil a more attractive feedstock option for biodiesel production.

The ringgit weakened 0.18% against the dollar, making the commodity more accessible to buyers with foreign currency.

Tags: prices, palm oil