Palm oil gains on the strength of rival oils and is set to gain for a second consecutive weekly.
The market was supported by a stronger ringgit and stronger edible oils.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for September delivery had gained 37 ringgit or 0.89% to 4,183 Ringgit ($993.42) per metric ton. The contract is up 2.98% this week.
A Kuala Lumpur-based broker said that "strong gains in Dalian’s refined bleached and deodorized palm oil at Asian trading hours have boosted Bursa Malaysia crude Palm Oil futures opening."
Dalian's palm oil contract, which is the most active contract, increased by 0.86%. Chicago Board of Trade Soyoil Prices fell by 0.36%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.
Data from the industry regulator showed that Malaysian palm oil stocks increased by 2.41%, reaching a 18-month high at 2.03 million tonnes at the end June.
According to data provided by cargo surveyor Intertek Testing Services, and inspection company AmSpec Agri Malaysia, exports of Malaysian products containing palm oil during the period July 1-10 rose between 5.3% to 12% compared to a month ago.
The oil prices rose Friday, after U.S. president Donald Trump announced he would be making an announcement about Russia. This raised the prospect of further sanctions against the major oil producer. However, tariff concerns and a rise in OPEC+ production capped gains.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency, the dollar, fell by 0.24%, making the commodity more affordable for buyers who hold foreign currencies.
Technical analyst Wang Tao stated that palm oil will likely break support at 4,134 Ringgit per ton, and drop towards the range of 4,072-4,096 Ringgit. Bernadette Cristina, Sumanshu Nandy and Subhranshu Sahu (Reporting)
(source: Reuters)
