Palm tracks Dalian, Chicago edible oils higher

Malaysian palm oil futures rose on Tuesday, tracking rival edible oils in Chicago and Dalian markets higher, while a weaker ringgit added support.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange gained RM13, or 0.32 per cent, to RM4,107 (US$994.19) a metric ton by 0247 GMT.

Dalian’s most-active soyoil contract gained 0.31 per cent, while its palm oil contract rose 0.49 per cent. Soyoil prices on the Chicago Board of Trade added 0.29 per cent.

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

Chicago soybean futures edged higher as traders assessed the pace of US soybean purchases by top buyer China following a trade truce between Beijing and Washington in late October.

Malaysian ringgit, palm’s currency of trade, eased 0.1 per cent against the US dollar on the day, making the contract cheaper for foreign currency holders.

Indonesia’s largest palm oil association GAPKI said it saw no major impact yet on palm oil production after the island of Sumatra was devastated by floods.

Oil prices climbed in early trade as market participants assessed risks stemming from Ukrainian drone strikes on Russian energy sites and mounting US-Venezuela tensions.

Palm oil may retrace into the RM4,013-RM4,041 per metric ton range, as it failed to break resistance at RM4,121, per Reuters technical analyst Wang Tao.

Stocks made muted gains and traders were wary on Tuesday, following a slide in cryptocurrencies and a global bond selloff triggered by a looming interest rate hike in Japan.

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