Palm oil tracks Dalian contract higher

Malaysian palm oil futures rose on Wednesday, extending gains from the previous session, tracking the strength in their Dalian counterparts and in overnight Chicago soyoil.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange gained 33 ringgit, or 0.79%, to 4,192 ringgit ($1,015.75) a metric ton by the midday break.

“Today’s crude palm oil future is cautious tracking Dalian palm oil and getting support from the firm Chicago soybean oil prices while waiting for new lead for the market,” a Kuala Lumpur-based trader said. Dalian’s most-active soyoil contract gained 0.27%, while its palm oil contract rose 1.46%.

Soyoil prices on the Chicago Board of Trade lost 0.28%. Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Malaysia’s palm oil inventories likely rose to a more than six-and-a-half-year high in November, as exports slumped amid record production for the month.

Malaysia’s Federal Land Development Authority (Felda) and its commercial arm FGV Holdings Berhad said they had been issued an order by Terengganu state to vacate palm oil plantation land there, warning it could impact operations and national output.

Meanwhile, India’s palm oil imports rose slightly in November as lower prices prompted refiners to increase purchases of the tropical oil while cutting back on more expensive soyoil and sunflower oil purchases.

Palm oil may test resistance at 4,202 ringgit per ton, a break above which would open the way towards 4,274 ringgit.

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