Palm gains on firm Dalian; weak crude, high stocks limit upside

Malaysian palm oil futures advanced for a second day on Thursday, with the January contract adding 26 ringgit, or 0.59%, to 4,436 ringgit per metric ton by midday. Business Recorder reported that strength in Dalian vegetable oils and overnight Chicago soyoil trading supported the move.

Gains were restrained by weaker crude prices, Malaysia’s elevated palm oil inventories and profit-taking near technical resistance, according to market researcher Anilkumar Bagani. Dalian soyoil rose 0.21% and its palm oil contract climbed 1.44%, while Chicago soyoil slipped 0.28%.

Lower crude prices reduce palm oil’s appeal as biodiesel feedstock, while a weaker ringgit makes the commodity less expensive for buyers using other currencies. Reuters technical analyst Wang Tao placed resistance at 4,471 to 4,489 ringgit per metric ton, with a break above that range opening a possible move toward 4,519 to 4,567 ringgit.