Palm oil breaks through key technical level, hitting a seven-week closing high
2025-10-08 20:30:42
On Wednesday (October 8), the main palm oil contract (FCPOc3) on the Bursa Malaysia Derivatives Exchange closed at 4,546 ringgit per ton, a sharp increase of 76 ringgit, or 1.7%, reaching its highest closing price since August 18. Technically, the upper Bollinger Band has moved up to around 4,503 ringgit, while the MACD histogram has expanded to 63.12, indicating a significant strengthening of bullish market momentum.
A Kuala Lumpur-based trader noted: "The overnight strength in soybean oil and crude oil directly drove the rise in palm oil futures today. After the December contract broke through the key psychological level of 4,500 ringgit, it triggered large-scale short covering and new long entries." This breakthrough trend has led to a clear shift in market sentiment towards optimism, and trading volume has also increased simultaneously.
In the crude oil market, news that OPEC+ will increase production less than expected next month pushed oil prices up over 1%, although concerns about potential oversupply limited further gains. Stronger crude oil prices have directly improved the economic viability of palm oil as a biodiesel feedstock. Meanwhile, Indonesia's Energy Minister has stated plans to mandate the implementation of B50 biodiesel, containing 50% palm oil-based biofuel, by 2026. This policy direction will provide stable support for palm oil consumption in the medium and long term.
Chicago Board of Trade soybean oil prices rose 0.72% today, moving in tandem with palm oil. While the Dalian Commodity Exchange remains closed due to China's National Day holiday, the global vegetable oil market is showing signs of strength.
The ringgit fell slightly by 0.05% against the US dollar, making dollar-denominated palm oil more attractive to overseas buyers, further boosting buying interest. The market focus now turns to the Chinese market, which is expected to resume trading tomorrow, and the monthly MPOB data to be released later this week.
This round of palm oil price gains is driven by the energy market, policy expectations, and technological breakthroughs. Despite significant short-term gains, the implementation progress of Indonesia's B50 plan and the global crude oil supply and demand landscape remain uncertain. If subsequent MPOB data confirms a downward inventory trend, prices may test higher resistance. Conversely, if actual data falls short of expectations, the current upward trend based on strong expectations may face correction pressure. Traders are advised to closely monitor price differentials and capital flows after the Chinese market reopens tomorrow.
Breakout triggers technical buying
A Kuala Lumpur-based trader noted: "The overnight strength in soybean oil and crude oil directly drove the rise in palm oil futures today. After the December contract broke through the key psychological level of 4,500 ringgit, it triggered large-scale short covering and new long entries." This breakthrough trend has led to a clear shift in market sentiment towards optimism, and trading volume has also increased simultaneously.
Dual favorable support from energy and policies
In the crude oil market, news that OPEC+ will increase production less than expected next month pushed oil prices up over 1%, although concerns about potential oversupply limited further gains. Stronger crude oil prices have directly improved the economic viability of palm oil as a biodiesel feedstock. Meanwhile, Indonesia's Energy Minister has stated plans to mandate the implementation of B50 biodiesel, containing 50% palm oil-based biofuel, by 2026. This policy direction will provide stable support for palm oil consumption in the medium and long term.
Chicago Board of Trade soybean oil prices rose 0.72% today, moving in tandem with palm oil. While the Dalian Commodity Exchange remains closed due to China's National Day holiday, the global vegetable oil market is showing signs of strength.
Monetary Factors and Market Outlook
The ringgit fell slightly by 0.05% against the US dollar, making dollar-denominated palm oil more attractive to overseas buyers, further boosting buying interest. The market focus now turns to the Chinese market, which is expected to resume trading tomorrow, and the monthly MPOB data to be released later this week.
This round of palm oil price gains is driven by the energy market, policy expectations, and technological breakthroughs. Despite significant short-term gains, the implementation progress of Indonesia's B50 plan and the global crude oil supply and demand landscape remain uncertain. If subsequent MPOB data confirms a downward inventory trend, prices may test higher resistance. Conversely, if actual data falls short of expectations, the current upward trend based on strong expectations may face correction pressure. Traders are advised to closely monitor price differentials and capital flows after the Chinese market reopens tomorrow.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
