Palm lifted by gains in rival oils, but set for third weekly drop

Malaysian palm oil futures climbed on Friday, buoyed by stronger rival Dalian and Chicago contracts and firmer crude oil prices, but remained on track for a third consecutive weekly loss.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 59 ringgit, or 1.59%, at 3,763 ringgit ($844.29) a metric ton by the midday break.

The contract has lost 3.9% so far this week.

Malaysian palm oil futures opened higher, lifted by a recovery in the soyoil, rapeseed oil and energy markets overnight, as well as a bullish recovery in Chinese vegetable oil futures in Asian hours, said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin Group.

“The steady buying by India has further helped the palm oil cause.”

Dalian’s most-active soyoil contract rose 0.53%, while its palm oil contract advanced 1.44%.

Soyoil prices on the Chicago Board of Trade were up 0.47%.

Palm oil tracks the prices of rival edible oils as they compete for a share of the global vegetable oils market.

Crude oil prices edged up, heading for a weekly gain of more than 3%, as US jobs data calmed demand concerns and fears of a widening Middle East conflict persisted. Brent crude futures rose 9 cents, or 0.11%, to $79.25 a barrel by 0406 GMT.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, strengthened 0.29% against the dollar, making the commodity more expensive for buyers holding foreign currencies.

Palm oil inventories in Malaysia are expected to drop in July for the first time after rising for three consecutive months, a Reuters survey showed.

Industry regulator the Malaysian Palm Oil Board is scheduled to release its monthly palm oil data on Aug. 12.

Tags: Malaysia, palm oil, futures, benchmark contract, soyoil