Palm oil rises two weeks in a row on the strength of rival oils

Malaysian palm futures rose Friday, logging its second weekly gain in spite of higher June stocks. This was due to stronger edible oils and the weaker ringgit.

At closing, the benchmark palm oil contract on Bursa Derivatives Exchange for September delivery gained 29 ringgit (0.7%), to 4,175 Ringgit ($982.35) per metric ton. The contract increased by 2.78% in the past week.

Anilkumar bagani, head of commodity research at Mumbai-based Sunvin Group, said that "Bursa Malaysia crude Palm Oil futures opened gap up today after sharply higher Dalian’s refined bleached Deodorized Palm Olein."

Dalian's palm oil contract, which is the most active contract, increased by 0.63%. Chicago Board of Trade Soyoil Prices fell by 0.64%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.

Bagani stated that although the Malaysian Palm Oil Board data for Thursday was slightly negative, the market ignored it because the delayed shipments of palm oil from June to July would increase the total exports in July.

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, the exports of palm oil products from Malaysia during July 1-10 rose between 5.3% to 12% compared to a month ago.

The oil prices were unchanged on Friday due to a weaker outlook by the International Energy Agency for the market this year, despite the tightness of the immediate market and concerns about U.S. Tariffs.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

Palm's trade currency, the ringgit (the palm equivalent of the dollar), has fallen by 0.12%, making it cheaper for buyers with foreign currencies.

Technical analyst Wang Tao stated that palm oil will likely break the support level of 4,134 ringgit a ton, and drop towards the range 4,072-4,096. $1 = 4.2500 Ringgit (Reporting and editing by Bernadette Cristina; Sumana Nady and Subhranshu S. Sahu).

(source: Reuters)