Malaysian Palm Oil Futures Rise After Three-Day Decline
Malaysian palm oil futures ended trading higher on Thursday, overcoming three consecutive sessions of decline. The primary factor behind the trend reversal was the increase in soybean oil prices on the Dalian exchange.
This is reported by AgroReview
Changes in the Palm Oil and Soybean Oil Markets
Thanks to positive dynamics in the crude oil market and strengthening soybean oil prices, palm oil was able to recover its previous losses. David Ng, a trader at Iceberg X in Kuala Lumpur, noted that palm oil prices are supported at 4,350 ringgit per ton, with resistance expected at 4,580 ringgit per ton.
As a result of trading, the benchmark FCPO1 contract for palm oil delivery in January on the Bursa Malaysia derivatives exchange rose by 14 ringgit (or 0.31%), reaching 4,470 ringgit (1,058.24 USD) per ton.
“When Dalian recovered from the morning low, palm oil futures stopped falling and began to rise alongside soybean oil,” the trader reported.
On the Dalian exchange, the most active soybean oil contract fell by 0.7%, while the CPO1 palm oil contract lost 1%. Meanwhile, on the Chicago Mercantile Exchange, soybean oil prices increased by 1.34%.
Impact of Global Trends and the Biodiesel Market
Palm oil traditionally reacts to price changes in competing edible oils, as these products compete for market share in the global vegetable oil market.
The biodiesel sector also has a significant impact on the market. According to Indonesia’s Minister of Energy, Bahlil Lahadalia, from January to September, biodiesel consumption in the country reached 10.57 million kiloliters, nearly 10% more than in the same period last year (9.61 million kiloliters).
On global markets, oil prices rose by more than 4% on Thursday, continuing the trend from the previous session. The increase in crude oil futures enhances the attractiveness of palm oil as a raw material for biodiesel production.
The exchange rate of the ringgit against the dollar increased by 0.02%, making Malaysian palm oil more expensive for international buyers who pay in other currencies.