"Palm Oil Prices Rise as Global Edible Oil Markets Strengthen"

JAKARTA, March 17 (Reuters) - Malaysian palm oil futures opened higher on Monday, buoyed by the stronger performance of rival edible oils in the Dalian and Chicago markets. 

The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange climbed 13 ringgit, or 0.29%, to 4,487 ringgit ($1,010.13) per metric ton in early trading. Despite this rise, the contract had seen a 1.02% decline in the previous week. 

Key Market Drivers 

Dalian’s most-active soyoil contract DBYcv1 recorded a 1.27% increase, while its palm oil contract DCPcv1 gained 0.68%. Similarly, soyoil prices on the Chicago Board of Trade BOcv1 rose by 1.01%. Palm oil prices tend to track movements in rival edible oils, given the competition for market share in the global vegetable oils sector. 

According to independent inspection firm AmSpec Agri, Malaysian palm oil product exports fell by 10.1% to 396,865 tons from February 1-15, while Intertek Testing Services reported a 7.5% decline to 420,677 metric tons. 

Impact of Crude Oil Prices and Currency Exchange 

Oil prices surged by approximately 1% on Monday after the United States reaffirmed its commitment to striking Yemen’s Houthis until the group ceases attacks on shipping. Stronger crude oil futures make palm oil a more attractive option for biodiesel feedstock, potentially supporting demand. 

Additionally, the Malaysian ringgit (MYR=), the currency in which palm oil is traded, weakened slightly by 0.02% against the dollar, making palm oil more affordable for foreign buyers and potentially boosting exports. 

Technical Outlook 

Reuters technical analyst Wang Tao indicated that palm oil prices might rise to 4,641 ringgit per metric ton, having surpassed a key resistance level at 4,562 ringgit. 

Broader Market Trends 

On the broader financial landscape, oil prices surged while U.S. stock futures slipped, contrasting with gains in Asian markets. Investors continue to assess the divergent economic trends between the United States and the rest of the world. With strong fundamentals and external market influences at play, palm oil’s price trajectory remains closely tied to global edible oil movements, crude oil trends, and currency fluctuations.