VEGOILS-Palm breaks five sessions of losses on stronger Chicago soyoil
01/08/2023 (Nasdaq), Jakarta - Malaysian palm oil futures inched higher on Tuesday, breaking a streak of five consecutive sessions of losses as soyoil in the Chicago Board of Trade recovered.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange gained 0.18% to 3,885 ringgit ($861.23) per tonne by midday, hitting its weakest level in nearly three weeks. However, lack of fresh data limited gains.
"A recovery in CBOT Soy oil futures in Asian hours on the back of a strong biofuel consumption data in May month has provided some relief to palm oil and a recovery was seen from the early set back," said Anilkumar Bagani, commodity research head at Mumbai based Sunvin Group.
However, the contract was unable to make significant recovery from a 3.02% drop on Monday as market participants awaits for July data.
"Trading was directionless due to lack of fresh positive data and cautious trading ahead of July supply and demand estimate," said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Dalian's most-active soyoil contract DBYcv1 declined 0.4%, while its palm oil contract DCPcv1 dropped 0.32%. Soyoil prices on the Chicago Board of Trade BOc2 rose 0.55%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Indonesia has set its crude palm oil (CPO) reference price at $826.48 per metric tonne for Aug. 1-15, keeping the export tax and levy unchanged from the previous period.
Palm oil exports from Malaysia in July rose 7.8% from the month before, according to AmSpec Agri Malaysia, while cargo surveyor Intertek Testing Services (ITS) estimated a 14% rise for the same period.
Oil prices were little changed on Tuesday, trading near a three-month high reached on Monday, on signs of tightening global supply, as producers implement output cuts, and strong demand in the United States, the world's biggest fuel consumer.O/R
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil FCPOc3 may fall to 3,778 ringgit per metric ton, as it has broken a support of 3,861 ringgit, Reuters technical analyst Wang Tao said.
($1 = 4.5110 ringgit)
Source: Reuters