JAKARTA: Malaysian palm oil futures jumped on Wednesday to their highest level in seven weeks, tracking overnight strength in U.S. soyoil prices amid concerns over crop losses in drought-hit Argentina, while a slowdown in palm production this month also supported.
The benchmark palm oil contract for May delivery rose 1.71% to 4,212 ringgit ($949.93) per tonne by the midday break, hitting its highest since Jan. 4, after a 0.6% drop on Tuesday.
Palm was supported by Argentina output concerns, a rally in Chicago Board of Trade (CBOT) soyoil futures overnight and a bullish momentum in Dalian palm olein futures, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Palm oil down after three-day rally on weaker rival oils
A severe drought is reducing yields in Argentina, a major soybean and corn producer, as well as the world’s biggest exporter of soy products, including soyoil and soymeal.
CBOT soyoil prices rose 0.13% during Asia hours after a 1.94% gain overnight. Dalian’s most-active soyoil contract climbed 0.38%, while its palm oil contract gained 1.07%.
Palm is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may retrace into a range of 4,039-4,083 ringgit per tonne, following its failure to break a resistance at 4,196 ringgit, said Reuters technical analyst Wang Tao.
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