Palm rises on bargain buying, stronger rival Dalian

Malaysian palm oil futures climbed on Thursday, buoyed by bargain hunters following two days of price drops and a stronger rival oil. The November delivery contract on Bursa Malaysia Derivatives Exchange rose 0.72% to 4,887 ringgit ($1,214) per metric ton by midday. Crude palm oil futures also gained on bargain buying after a sharp decline, while a slight recovery in Chinese vegetable oils contributed to the rebound.

Commodity research head Anilkumar Bagani noted growing worries about potential production losses next year due to fire hotspots in Indonesia’s Kalimantan region, while recent rains in Malaysia could bolster palm production. Dalian’s soybean oil contract rose 0.94%, and its palm oil contract gained 0.35%. Palm oil follows the price movements of rival edible oils, competing for a slice of the global vegetable oils market.

Oil prices dipped on Thursday, fueled by hopes that Iran and Qatar might resolve the Strait of Hormuz issue and cut supply disruptions from the Middle East war. The weaker ringgit, opposing palm's currency of trade, made the commodity slightly less expensive for foreign currency holders. Cargo surveyors estimated that Malaysian palm oil product exports for August 1-25 fell between 11.4% and 20% compared to the previous month.

Palm oil may face resistance at 4,894 ringgit per metric ton, with a break above potentially paving the way to 4,947 ringgit, according to Reuters technical analyst Wang Tao.