Palm oil futures saw a modest rise on Wednesday after hitting a seven-month low in the previous session. The gains were supported by a weaker ringgit, though they were limited by losses in rival Dalian contracts. The October delivery benchmark on the Bursa Malaysia Derivatives Exchange increased by 19 ringgit, or 0.51%, reaching 3,724 ringgit ($827.56) per metric ton by midday.
The contract had previously declined to its lowest closing price since 8th January on Tuesday. According to a Kuala Lumpur-based trader, the recovery was aided by the weakening of the ringgit, palm oil’s trade currency, which fell 0.67% against the dollar, making the commodity cheaper for foreign currency holders.
In contrast, Dalian’s most-active soyoil contract dropped by 1.34%, and its palm oil contract decreased by 1.58%. Meanwhile, soyoil prices on the Chicago Board of Trade inched up by 0.03%. The price movements of palm oil are closely linked to those of other edible oils, as they vie for market share in the global vegetable oils market.
Additionally, Brent crude futures saw a 0.42% increase, reaching $76.80 a barrel by 0513 GMT. Higher crude oil prices tend to make palm oil a more attractive option for biodiesel feedstock. A Reuters survey indicated that palm oil inventories in Malaysia are expected to decline in July for the first time after three consecutive months of increases. The Malaysian Palm Oil Board, the industry regulator, is set to release its monthly data on 12th August.
Technical analyst Wang Tao from Reuters suggested that palm oil might rebound to 3,784 ringgit per metric ton, having found support between 3,671 and 3,704 ringgit.
Dekel Agri-Vision PLC (LON:DKL) aspires to become a leading agro-industrial company in West Africa, one that creates value for shareholders whilst at all times placing the interests of the local communities and environment in which it operates in at the heart of its operations.
