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Malaysian palm oil futures extended gains to a sixth straight session on Wednesday, closing at their highest level in over two-and-a-half months, as strength in Dalian contracts outweighed profit-taking in other rival oils.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange climbed 56 ringgit, or 1.4%, to 4,044 ringgit ($979.89) a metric ton to close at its highest since July 5.
The contract has risen 8.24% over the last six sessions.
Malaysian palm oil futures are still on the uptrend as the Chinese government’s stimulus announcement has resulted in continuous strength in Dalian oils, a Kuala Lumpur-based trader said.
“We are also seeing some profit-taking on rival oils’ long contracts,” the trader said.
Dalian’s most-active soyoil contract rose 0.58%, while its palm oil contract added 1.38%. Soyoil prices on the Chicago Board of Trade fell 0.23%.
Palm oil tracks price movements in rival edible oils as they compete for a share of the global vegetable oils market.
Palm oil extends winning run on output concerns
The ringgit, palm’s currency of trade, strengthened 0.55% against the U.S. dollar, making the commodity more expensive for buyers holding foreign currencies.
Cargo surveyors estimate exports of Malaysian palm oil products rose between 13% and 13.9% during Sept. 1-25, compared with the same period a month ago.
Indonesia’s palm oil exports fell 36% to 2.241 million metric tons in July from a year earlier, data from the Indonesian palm oil association GAPKI showed.
Oil prices slipped on Wednesday as investors reassessed whether China’s latest stimulus plans will be able to boost its economy and spur fuel demand in the world’s largest crude importer.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Source: Business Recorder
