Palm oil prices rose in Europe on Thursday as Malaysian futures surged to two-week high and global markets rallied on prospects of further ECB support for the euro zone economy. Asking prices for RBD palmolein gained between $5 and $12.50, with the November-December contract climbing by $10 to $515 a tonne. That position last traded between $520 and $525, up to $15 above the previous day’s levels.
Crude palm oil (CPO) prices were also higher, with positions gaining as much as $15 a tonne. The front September contract rose $10 to $510 a tonne. Palmkernel oil marked the largest gains, with all positions lifted by $20 to $35. Stocks for September-October shipment were offered at $720 a tonne.
The rise was in line with stronger Malaysian palm oil futures, which rallied on weaker local currency and bargain-hunting trade. The benchmark November palm oil contract gained 2.3 percent, having slipped by 1.19 percent the previous day. “We’ve reached a point where it’s interesting to buy,” one trader said. “The weaker ringgit makes it more attractive to buy in US dollars, so there was more demand.” But a firmer dollar, which makes products denominated in the currency more expensive for international buyers, somewhat cooled palm oil trade in the European market.
“Unfortunately, the euro-dollar rate doesn’t help,” the trader added. “Hardly anybody in Europe wants to move at the moment.” Prices were also supported by a surge in global equities after the European Central Bank left interest rates unchanged, cut its growth forecast and hinted that it could dish out more economic support to the euro zone if inflation continues to lag.
Rapeseed oil prices tracked gains in the palm oil market, with most positions posting gains of up to 6 euros a tonne. The November-January position last traded at prices between 670 euros and 675 euros a tonne, broadly on par with asking prices. Coconut oil prices were lower, with the October-November position dipping by $10 to $1,000 a tonne. European soyabean oil prices edged slightly higher, with all positions gaining up to 3 euros a tonne. The front September-October position rose by 2 euros to 652 euros a tonne.
Chicago soyabean oil futures were also higher, with the December contract climbing 0.74 percent to 27.29 cents per lb at 1615 GMT. Soyabean futures, meanwhile, eased slightly after analytics firm Informa raised its yield and production forecasts for the US soyabean crop. The benchmark November contract dipped by 0.23 percent to $8.72 a bushel.