KUALA LUMPUR: Malaysian palm oil futures rose for a fourth straight session on Thursday, driven by expectations of palm production declines and lower national stockpiles.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 18 ringgit, or 0.4%, to 4,504 ringgit a metric ton at the midday break.
The contract has so far gained 5.33% for three consecutive sessions.
Crude palm oil prices opened higher today on prospects of weaker output and likely lower overall stock levels in the country, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
The Malaysian Palm Oil Board (MPOB) reported earlier this month that crude palm oil production was down 3.8% in September from August, while palm oil exports rose 0.93%.
Dalian’s most-active soyoil contract rose 0.36%, while its palm oil contract added 0.9%.
Soyoil prices on the Chicago Board of Trade were up 0.41%. Palm oil tracks prices of rival edible oils as it competes for a share of the global vegetable oils market.
Palm oil futures hits highest level in over two years
Oil prices climbed by more than 1%, almost reversing previous session’s losses, as Middle East tensions came back into focus ahead of the US presidential election despite a mixed bag of US fuel inventories.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.12% against the US dollar, making the commodity cheaper for buyers holding foreign currencies.
Cargo surveyors are expected to release Malaysian palm oil export estimates for October 1-25 on Friday.
Palm oil may break resistance at 4,518 ringgit per metric ton and rise into the 4,571-4,658 ringgit range, Reuters technical analyst Wang Tao said.
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