JAKARTA: Malaysian palm oil futures rebounded on Monday as expectations of a drop in stocks buoyed prices, though a stronger currency and weakness in Dalian oils capped gains.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange rose 0.30% to 3,964 ringgit ($907.92) a tonne by the afternoon closing, rebounding from a two-week low on Friday and a more than 4% weekly drop.
The contract rose as much as 3.41% earlier in the session as “external market improved and market poll was expecting November 2022 palm oil stockpiles dipped slightly,” a Kuala Lumpur-based trader said.
“However, firm ringgit limited some of the upside.” Malaysia’s palm oil inventories at end-November likely slipped from October as output slowed while imports jumped, a Reuters survey showed on Monday.
Soyoil prices on the Chicago Board of Trade gained 0.21% by afternoon trade in Asia hours, after losing 10.80% over the four previous sessions.
Dalian’s most active soyoil contract closed 0.24% lower, while its palm oil contract fell 2.01%. They rose as much as 1.03% and 0.62%, respectively, earlier in the session.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The ringgit strengthened by 0.39% against the US dollar on Monday, its fourth day of gains and hit a seven-month high. A stronger ringgit makes palm oil less attractive for holders of foreign currencies.
Palm oil may drop further into a range of 3,837-3,891 ringgit a tonne, probably after a moderate bounce to 4,029 ringgit, Reuters technical analyst Wang Tao said.
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