Palm firms on stronger rival oils, crude oil weakness limits gains
19.01.2024 (XM) - KUALA LUMPUR, Jan 19 (Reuters) -Malaysian palm oil futures rose for a second session on Friday, tracking strength in rival edible oils, although weaker crude oil prices capped the gains.
The benchmark palm oil contract FCPOc3 for April delivery on the Bursa Malaysia Derivatives Exchange rose 38 ringgit, or 0.98%, to 3,933 ringgit ($834.50) in early trade.
FUNDAMENTALS
* Dalian's most-active soyoil contract DBYcv1 edged up 1.34%, while its palm oil contract DCPcv1 gained 1.91%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.36%.
* Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
* Oil prices drifted lower after a rally the day before, as geopolitical tensions and disruptions in U.S. oil production from a cold blast were countered by concerns over slow demand growth in China. O/R
* Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
* The ringgit MYR=, palm's currency of trade, rose 0.11% against the dollar, making the commodity more expensive for buyers holding foreign currency.
* Malaysian crude palm oil (CPO) prices are expected to rise in 2024, as stagnant production despite rising demand for biodiesel is seen offsetting the impact of higher output of rival oils, a Reuters poll showed.
* Palm oil may retest resistance at 3,904 ringgit per metric ton, a break above could lead to a gain into the 3,929-3,953 ringgit range, Reuters technical analyst Wang Tao said. TECH/C
MARKET NEWS
* Asian shares bounced, buoyed by a rally in regional chipmakers, while the yen was set to end the week with heavy losses as investors pared back bets the Bank of Japan would soon abandon its uber-easy policies. MKTS/GLOB
DATA/EVENTS
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($1 = 4.7130 ringgit)