JAKARTA: Malaysian palm oil futures rose on Wednesday, tracking overnight strength in US soyoil prices amid concerns over crop losses in drought-hit Argentina, but their reversal during Asia hours capped palm oil’s gains.
The benchmark palm oil contract for May delivery ended the afternoon trade at 4,148 ringgit ($934.44) per tonne, up 0.17%. The contract rose as much as 2.08% earlier in the day, hitting its highest since Jan. 4, before erasing some of its gains.
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.
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 posted a 1.94% gain overnight, but dropped 0.81% during Asia’s afternoon trade. Dalian’s most-active soyoil contract ended with a thin loss of 0.04%while its palm oil contract gained 0.66%.
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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