SINGAPORE: Malaysian palm oil futures snapped a five-day losing streak on Wednesday, tracking overnight
soyoil gains on the Chicago Board of Trade and higher crude oil prices.
The benchmark palm oil contract for September delivery on
the Bursa Malaysia Derivatives Exchange rose 1.3% to 2,327 ringgit ($543.82) a tonne by midday.
The contract had been extending losses for five consecutive sessions on demand concerns as coronavirus infections surge.
Supporting prices were an overnight rally in rival soyoil on the Chicago Board of Trade (
CBOT) which hit their highest in nearly three months on a smaller-than-expected U.S. plantings figure and spillover strength from corn. It, however, last traded 0.1% lower.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Higher crude oil prices also supported palm, said a Kuala Lumpur-based trader.
Oil prices rose after an industry report showed crude inventories in the United States fell much more than expected, suggesting demand is improving even as the coronavirus spreads with ever increasing rates of infection.
Firmer crude prices make palm a more attractive option for biodiesel feedstock.
Elsewhere, Dalian's most-active soyoil contract rose 0.5%, while its palm oil contract fell 0.7%.
Capping gains, however, was a stronger ringgit which rose 0.1% against the dollar on Wednesday.
Palm oil may end its drop around a support at 2,283 ringgit per tonne, as suggested by a projection analysis and a falling channel, Reuters analyst Wang Tao said.