Mumbai, June 28 (Commodities Control): Malaysian palm oil futures continued their upward momentum on Friday, marking the third consecutive day of gains. This surge is expected to break a three-week decline, fueled by concerns about reduced production and rising prices of competing edible oils.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange rose by 35 ringgit, or 0.9%, to reach 3,925 ringgit ($831.74) per metric ton by midday. This trajectory indicates a 0.64% increase for the week.
Market apprehensions regarding output in Malaysia, the world's second-largest palm oil producer, have been mounting due to industry forecasts predicting a decline in production for June. However, positive news from India, the leading edible oil importer, suggests that the country's annual monsoon is progressing well, which could potentially boost domestic oilseed production and limit the need for palm oil imports.
In other markets, Dalian's most-active soyoil and palm oil contracts experienced gains of 0.6% and 1% respectively, while soyoil prices on the Chicago Board of Trade edged up by 0.05%.
Rising oil prices, driven by expectations of interest rate cuts by the U.S. central bank, further bolster the appeal of palm oil as a biodiesel feedstock. Nevertheless, despite the recent rally, technical analysis suggests that palm oil prices may retest support at 3,843 ringgit per metric ton, as the overall downtrend remains intact.
While the recent surge in palm oil prices offers a respite from the previous decline, market watchers remain cautious due to underlying concerns about production levels and potential price corrections. The evolving dynamics of global oil markets and weather patterns in key producing regions will continue to shape the trajectory of palm oil prices in the coming weeks.
Global Futures Palm oil and Soy Oil
(By Commoditiescontrol Bureau; +91-9820130172)
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