Palm oil is boosted by gains in competing oils but will still drop for a third consecutive week
Malaysian palm futures rose on Friday, boosted by the stronger Dalian and Chicago contracts, and higher crude oil prices. However, they remain on course for a loss of a third week in a row.
By midday, the benchmark palm oil contract on Bursa Derivatives exchange for October delivery was up 59 Ringgit or 1.59% at $3763 Ringgit ($844.29) per metric ton.
This week, the contract has fallen by 3.9%.
Anilkumar bagani, head of commodity research at Mumbai's Sunvin Group, says that Malaysian palm futures have opened higher due to a rebound in the markets for soyoil and rapeseed oils overnight.
The steady purchases by India have further aided the cause of palm oil.
Dalian's palm oil contract grew by 1.44%, but its most active soyoil contract climbed 0.53%. Chicago Board of Trade soyoil prices were up by 0.47%.
As rival edible oils compete to gain a piece of the global vegetable oil market, palm oil monitors the prices of their competitors.
Crude oil prices rose, aiming for a gain of over 3% in a week, as U.S. employment data eased concerns about demand and continued fears of an expanding Middle East conflict.
Brent crude futures were up 9 cents or 0.11% to $79.25 per barrel at 0406 GMT. Palm oil is more appealing as a biodiesel feedstock due to the stronger crude oil futures.
The palm ringgit's trade currency strengthened by 0.29% versus the dollar. This made the commodity more costly for buyers who hold foreign currencies.
A survey shows that palm oil inventories are expected to fall in Malaysia in July after increasing for three months in a row.
The Malaysian Palm Oil Board, the industry regulator, is set to release its palm oil statistics for August 12. The Malaysian Palm Oil Board will release its monthly palm oil data on August 12.
(source: Reuters)
