Palm rises on bargain buying, Chicago soyoil

Malaysian palm oil futures rebounded on Thursday after two straight sessions of losses, supported by strength in Chicago soyoil, and bargain buying.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 35 ringgit, or 0.91%, to 3,874 ringgit ($916.71)a metric ton by the midday break.

“Bursa Malaysia CPO futures initially opened with a mixed to lower trend, but later experienced a recovery due to bargain buying, following a sharp rally in energy prices and indications of stability in Chinese vegetable oil futures,” said Anilkumar Bagani, commodity research at Mumbai-based brokerage Sunvin Group.

Strength in Chicago soyoil during Asian trading hours also added support to the contract, he said.

Dalian’s most-active soyoil contract was down 0.23% while its palm oil contract was up 0.02%. Soyoil on the Chicago Board of Trade (CBOT) gained 0.35%.

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

Malaysian ringgit, the contract currency of trade, strengthened 0.21% against the U.S. dollar, making the contract more expensive for foreign currency holders.

Palm oil may retest the support level of 3,812 ringgit per metric ton, with a good chance of breaking below it and falling towards 3,768 ringgit.

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