Malaysian palm oil futures climbed on Thursday, driven by strong performances in rival Dalian contracts and a weaker ringgit. However, losses in crude oil somewhat limited these gains. The December delivery contract on the Bursa Malaysia Derivatives Exchange saw an increase of 68 ringgit, or 1.77%, reaching 3,913 ringgit ($917.47) per metric ton at 0246 GMT.
This rise follows a 3% gain in the previous session, marking the most significant single-day increase since 24 July 2023.
In the broader market, Dalian’s most-active soyoil contract grew by 0.82%, while its palm oil contract advanced 2.33%. In contrast, Chicago Board of Trade’s soyoil prices saw a slight decline, down 0.15%. Palm oil tends to follow the price trends of other edible oils as they compete for a larger portion of the global vegetable oils market.
The ringgit, the currency used in palm oil trading, weakened by 0.5% against the US dollar, making the commodity more affordable for buyers using foreign currencies. Meanwhile, oil prices fell during Asian trading after a larger-than-expected interest rate cut by the Federal Reserve raised concerns about the health of the US economy. Brent crude futures for November dropped by 0.29% to $73.44 per barrel as of 0236 GMT. Weaker crude oil prices reduce the appeal of palm oil as a biodiesel feedstock option.
Looking ahead, crude palm oil prices are anticipated to remain stable this month. The Malaysian Palm Oil Council (MPOC) noted on Wednesday that a strengthening ringgit might offset tighter supplies and flat exports to key markets. The MPOC expects prices to fluctuate within the range of 3,850 to 4,050 ringgit per metric ton during September.
According to Reuters technical analyst Wang Tao, palm oil may retrace within the range of 3,819 to 3,833 ringgit per metric ton. A recent bounce from the 17 September low of 3,702 ringgit could run out of momentum around the resistance level of 3,893 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.
