Palm on track for weekly gain on stronger rival oils
SINGAPORE, March 8 (Reuters) -Malaysian palm oil futures roseon Friday and were headed for a weekly gain amid higher edible and crude oil prices, although a stronger ringgit capped further advance.
The benchmark palm oil contract FCPOc3 for May delivery on the Bursa Malaysia Derivatives Exchange rose 13 ringgit, or 0.32%, to 4,084 ringgit a metric ton at midday.
The contract hit 4,119 ringgit earlier in the session, its highest level since July 27. It is headed for aweekly gain of about 3%, fuelled by tight supply and optimism over palm demand.
Citing lower productions in key palm-producingcountries, palm oil is likely to “continue to ration demand, pricing itself at a premium to available soft oil alternatives,” said Pranav Bajoria, director of Singapore-based brokerage Comglobal Pte Ltd.
Dalian’s most-active soyoil contract DBYcv1 rose 1.68%,while its palm oil contract DCPcv1 gained 1.43%. Soyoil prices on the Chicago Board of Trade BOcv1 climbed 1.19%.
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 on Friday, driven by growing demand in the world’s biggest consumers, the United States and China, while the Federal Reserve gave a positive signal on the possibility of rate cuts. O/R
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The Malaysian ringgit MYR=, palm’s currency of trade, was up 0.28% against the dollar. It rose as much as 0.6% earlier in the session to its highest level sinceJan. 16.
The Bank Negara Malaysia stood steady on interest rates for a fifth straight meeting on Thursday, where it reiterated that the currency was undervalued and did not reflect Malaysia’s positive economic fundamentals and prospects.
A stronger ringgit makes palm oil less attractive for foreign currency holders.
Palm oil may break resistance at 4,106 ringgit and climb into a range of 4,106-4,158 ringgit per metric ton, said Reuters technical analyst Wang Tao. TECH/C
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