KUALA LUMPUR: Malaysian palm oil futures opened higher on Monday for a second consecutive session, supported by stronger Dalian palm olein and Chicago soyoil.
Palm oil ends with more than 5% weekly losses
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange gained 41 ringgit, or 0.94%, to 4,409 ringgit ($980.00) a metric ton in early trade.
Fundamentals
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Dalian’s most-active soyoil contract fell 0.96%, while its palm oil contract added 1.67%. Soyoil prices on the Chicago Board of Trade climbed 0.63%.
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Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
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Oil prices hovered at their highest levels since October as investors eyed the impact on global fuel demand from colder weather in the Northern Hemisphere and Beijing’s economic stimulus measures.
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Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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The ringgit, palm’s currency of trade, weakened 0.07% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
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Indonesia’s energy and mineral resources minister signed a decree last Friday allocating 15.6 million kilolitres of biodiesel for 2025 distribution, while giving the industry until the end of next month to adapt to the higher level of the fuel in the mix.
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India’s palm oil imports in December plunged to their lowest in nine months as a rally in prices to a 2-1/2-year high prompted refiners to increase purchases of substitute soyoil that was available at a discount, five dealers said.
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Palm oil may test resistance zone of 4,423 ringgit to 4,460 ringgit per metric ton, as it has stabilized around key support at 4,263 ringgit, Reuters technical analyst Wang Tao said.
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