Palm oil rises on stronger Dalian soyoil, weak ringgit

Malaysian palm oil futures rose on Thursday after four consecutive sessions of losses, supported by strength in Dalian soyoil and a weakening ringgit, but were set to post a second monthly drop.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained RM6, or 0.14 per cent, to RM4,258 (US$1,008.05) a metric ton, as of 0243 GMT.

The contract has lost 2.3 per cent so far in October.

Dalian’s most-active soyoil contract was up 0.77 per cent, while its palm oil contract lost 0.34 per cent. Soyoil prices on the Chicago Board of Trade shed 0.28 per cent.

Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Indonesia’s palm oil stocks dropped slightly in August to 2.54 million metric tons, 1 per cent lower than a month earlier, with falling output offsetting a decline in exports, Indonesia’s palm oil association GAPKI said.

The ringgit, palm’s currency of trade, weakened 0.26 per cent against the dollar. A weaker ringgit makes palm oil more attractive for buyers holding foreign currencies.

Palm oil is expected to bounce further into a range of RM4,289-RM4,308 per metric ton, as suggested by a falling channel and the hourly RSI, said Reuters technical analyst Wang Tao.

Asian stocks advanced in morning trading on Thursday after the Federal Reserve cut interest rates and US and Chinese leaders met to thrash out a trade deal, with the Bank of Japan also due to decide on interest rates imminently.

Tags: soyoil, Malaysia, palm oil, futures, benchmark contract