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VEGOILS-Palm rises on stronger soyoil, positive export demand

The price of Malaysian palm oils futures increased for the second session in a row on Thursday. This was due to a stronger soyoil, and strong demand from export markets.

By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for December delivery had gained 50 ringgit or 1.14% to 4,438 Ringgit ($1,055.91).

David Ng, a proprietary trading at Kuala Lumpur's Iceberg X Sdn. Bhd., said that crude palm oil was higher due to overnight strength on the soybean oil markets.

The recent strong export performances also lifted the market sentiment. He said that prices are supported above 4,400 Ringgit and there is resistance at 4,550 Ringgit.

Exports of palm oil products from Malaysia rose between 7.3% to 9.6% in September, according to cargo surveyors.

The Chicago Board of Trade reported a 0.28% increase in soyoil. The Dalian Commodity Exchange will be closed for holidays from October 1-8.

As palm oil competes to gain a share in the global vegetable oil market, it tracks price changes of competing edible oils.

The oil prices increased after three sessions of losses due to concerns about market oversupply. Also, the possibility of tighter sanctions against Russian crude gave some support.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The palm ringgit's trade currency strengthened by 0.05% in relation to the dollar. This made the commodity slightly cheaper for buyers who hold foreign currencies.

The statistics bureau reported that Indonesia exported 16,20 million tonnes of crude and refined Palm Oil between January and August, an increase of 13.56% compared to the same period in the previous year.

Technical analyst Wang Tao stated that palm oil could bounce between 4,429 and 4,457 ringgit a ton as it has broken through the resistance level of 4,401 ringgit. ($1 = 4.2030 ringgit)

(source: Reuters)