Palm rises on bargain buying, stronger rival Dalian

By KUALA LUMPUR: Malaysian palm oil futures rebounded on Thursday, driven by bargain buying after two straight sessions of declines and firmer rival Dalian oils. The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 35 ringgit, or 0.72%, at 4,887 ringgit ($1,214) a metric ton by the midday break. Crude palm oil futures traded higher on some bargain buying after the recent steep fall, while a moderate recovery in Chinese vegetable oils helped palm prices rebound, said Anilkumar Bagani, commodity research head at brokerage Sunvin Group. The contract fell 3.31% over the last two sessions. Bagani added that there were growing concerns over potential production losses next year due to fire hotspots in Indonesia's Kalimantan region, while recent rains in Malaysia could support palm production there. Dalian's most-active soyoil contract rose 0.94%, while its palm oil contract gained 0.35%. Soyoil prices on the Chicago Board of Trade were down 1.7%. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Oil prices fell on Thursday, extending a streak of losses, on expectations that talks between Iran and Qatar might open the Strait of Hormuz and reduce supply disruptions from the war in the Middle East. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm's currency of trade, weakened 0.1% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies. Cargo surveyors estimated that exports of Malaysian palm oil products for August 1-25 fell between 11.4% and 20% from a month earlier. Palm oil may test resistance at 4,894 ringgit per metric ton, a break above could open the way toward 4,947 ringgit, Reuters technical analyst Wang Tao said.