SINGAPORE: Malaysian palm oil futures snapped a five-day losing streak on Friday amid a jump in oil prices, even as the contract is set for a second consecutive weekly decline.
Palm oil range-bound as slowing demand outlook weighs
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 40 ringgit, or 1%, to 4,024 ringgit ($840.26) a metric ton in morning trade as of 0232 GMT, ending its longest losing streak since early December.
The contract, however, is poised for a near 6% weekly decline.
Fundamentals
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Dalian’s most-active soyoil contract rose 0.37%, while its palm oil contract was up 0.54%. Soyoil prices on the Chicago Board of Trade climbed 1.14%.
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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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The Malaysian ringgit, palm’s currency of trade, weakened 0.17% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.
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Oil prices jumped $3 a barrel on Friday in reaction to reports that Israeli missiles had struck sites in Iran, sparking concerns that Middle East oil supply could be disrupted.
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Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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Palm oil may break support at 3,969 ringgit per metric ton, and fall further to the 3,899-3,942 ringgit range, said Reuters technical analyst Wang Tao.
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