SINGAPORE: Malaysian palm oil futures rose on Friday amid higher edible and crude oil prices, and are headed for a more than 3% weekly gain.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange rose 48 ringgit, or 1.18% to 4,119 ringgit ($878.63) a metric ton in morning trade, the highest intraday price reached since July 27.
It had gained 0.27% during overnight trade.
Malaysian palm oil futures rise
The contract is set for a weekly gain of around 3.6%, fuelled by tight supply and optimism over palm demand.
Fundamentals
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Dalian’s most-active soyoil contract rose 1.33%, while its palm oil contract gained 0.96%. Soyoil prices on the Chicago Board of Trade increased 0.78%.
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Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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Oil prices rose on Friday, driven by growing demand in the United States and China, the world’s biggest oil consumers, and as the US Federal Reserve gave a positive signal on possibility of rate cuts.
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Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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The Malaysian ringgit, palm’s currency of trade, strengthened 0.32% against the dollar. It rose as much as 0.6% earlier in the session, the highest since Jan. 16.
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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.
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