Palm oil clocks first weekly rise in four
Malaysian palm oil futures rose for the third session, ending a three-week decline due to concerns over poor production and tracking higher rival edible oils. The benchmark September contract gained 26 ringgit, or 0.67%, to 3,916 ringgit ($830.54) per metric ton, rising 0.4% for the week. Support came from bullish energy prices and Indonesia’s B40 biodiesel programme. Dalian and Chicago soyoil prices also increased, making palm oil more attractive for biodiesel feedstock.
BEIJING, June 28 (Reuters) -Malaysian palm oil futures ended higher fora third session on Friday, snappinga three-week decline, on concerns over poor production and tracking higher rival edible oils.
The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange gained 26 ringgit, or 0.67%, to 3,916 ringgit ($830.54) a metric ton.
For the week, it rose 0.4%.
Market participants are concerned about output in Malaysia, the world’s second largest producer, after industry forecasts pegged production to decline in June.
Additional support came from the bullish energy prices and reports of top producer Indonesia targeting to implement its B40 palm oil biodiesel programme by 2025, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
India’s annual monsoon has covered more than three-fourths of the country and it is set to cover the entire country on time for the planting season despite stalling earlier this month, two senior weather officials said on Thursday.
Good rainfall in India, the world’s largest edible oil importer, can boost production of summer-sown oilseeds such as soybeans and groundnut, limiting the requirement for palm oil imports in the new marketing year starting from Nov. 1.
Dalian’s most-active soyoil contract DBYcv1 rose 0.5,while its palm oil contract DCPcv1 gained 0.7%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices rose and were on course for a third straight weekly jump, buoyed by growing expectations that the U.S. Federal Reserve will soon start cutting interest rates and U.S. inflation data due later in the day. O/R
Higher crude oil futures make palm a more attractive option for biodiesel feedstock.
($1 = 4.7150 ringgit)
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