JAKARTA: Malaysian palm oil futures rose for a third day in strong trading yesterday after a jump in crude oil prices overnight and gains in competing vegetable oil markets, while recent data showing weaker exports and a stronger ringgit had little impact.
By the midday break, the benchmark November palm oil contract on the Bursa Malaysia Derivatives exchange was up 1.16% at RM2,014 after trading in a range between RM1,973 and RM2,019.
Yesterday’s total traded volume was high, at 23,272 lots of 25 tonnes each, compared to the usual 13,500 lots by midday.
“Palm is up purely on the back of external market factors,” a trader with a foreign commodities brokerage in Malaysia told Reuters, referring to the 8% gains in crude oil prices overnight and increases in the vegetable oil contracts on China’s Dalian Commodity Exchange.
“It’s pretty strong,” the trader said, adding that yesterday’s more than 1% rise in the Malaysian ringgit, which benchmark palm is priced in, was having no impact on palm oil prices.
“I think it has no bearing,” the trader said, adding that recent export data was also having little or no impact.
The currency was up 1.002% at 4.15 per dollar by 0510 GMT, stretching its gaining streak into a third session. The ringgit has been Emerging Asia’s worst performing currency, losing nearly 17% so far this year, on weakness in global currencies and domestic political woes.
Exports of Malaysian palm oil products for August fell 1.2% to 1,525,389 tonnes from 1,543,868 tonnes shipped during July, cargo surveyor Intertek Testing Services said on Monday.
Wang Tao, a Reuters market analyst of commodities and energy technicals, said palm oil may fall to RM1,936 per tonne, as it has failed to break a resistance at RM1,981.
In competing vegetable oil markets, the most active January soybean oil contract on the Dalian Commodity Exchange was up 0.37%, while Dalian palm oil for January was up 1.12%. The US December soyoil contract was down 0.74% in early Asian trade.
Oil prices fell nearly 3% in Asian trade yesterday, with investors covering short positions and taking profits after Brent and US crude soared more than 8% in the previous session. – Reuters
Source : The Sun Daily
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