PALM oil gained yesterday on signs demand for the world’s cheapestcooking oil continues to strengthen, and as a weakening dollar boosted
the investment appeal of commodities as a hedge against inflation.
February-delivery
palm oil rose as much as 1.6 per cent to RM2,518 a metric ton, the
highest level since August 18, and traded at RM2,482 at 3.30 pm close
in Kuala Lumpur. Palm oil is headed for a fourth weekly advance.
“It
will be interesting to see whether producers look to sell into this
strength, or hold out for higher prices,” Scott Briggs, the
agricultural commodities strategist at Australia and New Zealand
Banking Group Ltd, said in Melbourne.
Palm Oil Rallies on Stronger Demand
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Exports from Malaysia, the second-largest producer, rose 6.4 per cent
to 1.18 million tons in the first 25 days of this month compared with
October, Societe Generale de Surveillance, an independent cargo
surveyor, said. The gains were led by India.
Overseas sales rose 1.2 per cent to 1.13 million tons in the first 25 days of November, another surveyor Intertek said.
Other
farm commodities including corn and soybean oil, a direct rival to palm
oil, also climbed as the dollar weakened against a basket of six
currencies.
While investors are driven to agricultural
commodities by the threat of inflation, “in the last week, equity
markets and the dollar have struggled to send a strong signal either
way on economic expectations,” Briggs said. “Commodity prices will
continue to be choppy until they do.”
Technical charts indicate crude palm oil may soon retest the RM2,500 resistance level, RHB Research Institute said November 23.
The
commodity may find support at RM2,200, the report said. The relative
strength index has held at more than 70 since November 20, a level some
investors use to indicate prices are about to drop, and was last at
74.42.
Source : Business Times
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