Malaysian Palm Oil Price Ends Higher After Chart Support Holds

Malaysian Palm Oil Price Ends Higher After Chart Support Holds

KUALA LUMPUR: Malaysian palm oil futures ended higher on Wednesday, reversing losses from the early session as a round of technical buying and short covering underpinned it, although a drop in crude oil prices and a stronger ringgit limited gains. 

The benchmark February contract on the Bursa Malaysia Derivatives Exchange had inched up 1 percent to 2,239 ringgit ($668) per tonne by the day’s close, recovering from a decline of as much as 0.5 percent in early trade. 

Total traded volume stood at 49,731 lots of 25 tonnes, above the usual 35,000 lots. “Prices could not close below 2,190 ringgit in yesterday’s trade so it pulled up. After testing that support level, prices should move higher to test the resistance between 2,280-2,300 ringgit,” said a trader with a foreign commodities brokerage in Kuala Lumpur.  “Fundamentally, there’s no real push – it’s all technical.” The rise, however, was limited to futures prices while spot month prices did not rally, traders said. 

A second Kuala Lumpur-based palm oil trader said profit-taking after the recent selldown in future prices also provided support.

Prices of palm oil, the world’s most traded vegetable oil, were pressured by gains in the Malaysian ringgit as well as lower crude oil prices that reduces palm’s attractiveness to be used as an additive for biofuel blending. “We expect further gains in Bursa crude palm oil future prices to be short-lived by the ringgit’s appreciation,” said Lingam Supramaniam, director at Malaysia-based commodities firm Pelindung Bestari.

Brent crude oil steadied below $79 a barrel on Wednesday after Saudi Arabia signalled it was unlikely to push for a major change in OPEC oil output despite a collapse in prices.

The ringgit advanced as far as 0.5 percent to 3.3360 per dollar on Tuesday, its strongest since Nov. 14.

Market players are also watching for a vegetable oil industry meet in Indonesia this week, as well as a meeting of oil ministers from the Organization of Petroleum Exporting Countries (OPEC) on Thursday. 

In other competing vegetable oil markets, the U.S. soyoil contract for December rose 0.1 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodities Exchange fell 0.5 percent.   Palm, soy and crude oil prices at 1104 GMT                                                                                                                                   

Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      DEC4    2205    +4.00    2200    2216     301
  MY PALM OIL       JAN5    2240   +25.00    2209    2243    5789
  MY PALM OIL       FEB5    2239   +23.00    2206    2243   28624
  CHINA PALM OLEIN MAY5    5306    -2.00    5302    5350  649236
  CHINA SOYOIL     MAY5    5876   -30.00    5876    5926  413900
  CBOT SOY OIL     JAN5   33.67    +0.10   33.38   33.68    6375
  INDIA PALM OIL   NOV4  442.70    +0.10  441.60  443.00     162
  INDIA SOYOIL     DEC4  591.20    -1.75  588.50  594.00   34450
  NYMEX CRUDE      JAN5   74.20    +0.11   73.64   74.48   27801
                                                                                                                   Palm oil prices in Malaysian ringgit per tonne   CBOT soy oil in U.S. cents per pound   Dalian soy oil and RBD palm olein in Chinese yuan per tonne   India soy oil in Indian rupee per 10 kg   Crude in U.S. dollars per barrel     ($1 = 3.35 Malaysian ringgit)     ($1 = 6.1389 Chinese yuan) ($1 = 61.847 Indian rupee)- Reuetrs   Source : The Star
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