On Friday, Malaysian palm oil futures registered their second consecutive weekly increase and reached their highest close in more than six weeks, helped by stronger competing edible oils on the Dalian exchange and a lower ringgit.
On Friday, the benchmark palm oil contract for May delivery increased for a second day in a row, rising 1.65% to 4,136 ringgit ($933.63) a ton. Early trading saw the contract reach 4,170 ringgit per ton, its highest level since January 4, and it increased 5.22% for the week.
Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group, stated that “Crude palm oil futures opened gap higher for the third straight day following bullish Chicago soy oil futures overnight and Dalian RBD palm olein, soy oil and ZCE rapeseed oil futures in Asian hours today.”
“Sellers are inflexible to cut prices due to the increase in Indonesian palm oil export taxes and levies… together with the reduction in palm oil export availability till Ramadan,” he continued.
According to a trade group, refiners’ purchases of soybean and sunflower oils increased this week because of a narrowing price differential with competing oils, which caused a 25% drop from December to their lowest level in six months.
More about Palm Oil and Dalian exchange
Early trading saw a rise of 82 ringgit, or 2.02%, to 4,151 ringgit ($938.08) a ton for the benchmark palm oil contract for delivery in May.
Dalian’s most active palmoil contract (DCPv1) jumped 3.41% while its most active soy oil contract (DBYv1) gained 2.29%. On the Chicago Board of Trade (BOc2), soy oil prices decreased by 0.14%. As they contend for a piece of the global vegetable oil market, changes in the prices of related oils impact palm.
The contract currency for trade, the Malaysian ringgit, fell 0.63% in early trading. Palm oil is more appealing to holders of foreign currencies when the ringgit is weaker.
The next resistance level for palm oil is at 4,196 ringgit; a break over this level might result in a gain to 4,311 ringgit. According to Reuters technical expert Wang Tao, the present rally is tentatively categorized as a part of a broad flat pattern evolving from the bottom of 3,721 ringgit set on December 12, 2022.
