Palm set for weekly jump on improving demand, stronger rivals
Malaysian palm oil futures ticked up on Friday and were on track for theirfirst weekly gain in four on robust demand, aweaker ringgit and stronger rival edible oils.
The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange rose 1 ringgit, or 0.03%, to 3,924 ringgit ($845.69) per metric ton, extending gains for a fourth session.
For the week, the contract has risen 5.6%so far.
“The palm oil market was supported this week by strong Indian and European demand as well as the forward expectations of higher priced soybean oil given the strong crushing activity and domestic demand in the United States,” said Marcello Cultrera, director at Singapore-based commodities consultancy Apricus 8 Pte Ltd.
However, higher mid-term palm inventories and revised Indian export duties for palm and soft oils were pressuring prices, Cultrera added.
The European Union said on Thursday it had launched an investigation into whether biodiesel from Indonesia was circumventing EU duties by going through China and Britain.
The ringgit MYR=, palm’s currency of trade, has declined 1.2% against the dollar so far this week, making the edible oil cheaper for buyers holding foreign currency.
Dalian’s most-active soyoil contract DBYcv1 rose 1.1%, while its palm oil contract DCPcv1 gained 1.1%.
Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.5%,rising for a fifth straight session,as hot and dry weather conditions in the U.S. Midwest could reduce production.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may retrace towards 3,861 ringgit per metric ton, as it faces a resistance at 3,943 ringgit, Reuters technical analyst Wang Tao said.
Source: Reuters (Reporting by Mei Mei Chu; Editing by Subhranshu Sahu and Eileen Soreng)
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