KUALA LUMPUR: Malaysian palm oil futures gained on Friday, logging a weekly rise ahead of widely watched data from the palm oil board, while gains were capped by an industry estimate of higher-than-expected increase in March production.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed up 93 ringgit, or 1.6%, at 5,920 ringgit ($1,402.84) a tonne, ending a two-day decline.
For the week, the contract has gained 6.36%.
“Palm started off higher on bargain-buying following a sharp sell-off yesterday from a higher-than-expected March production.
Rival vegetable oils on the Chicago Board of Trade pulled the market higher,“ Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics, said.
Trading is cautious ahead of March supply-and-demand data from the Malaysian Palm Oil Board due on Monday, Varqa added.
Palm falls more than 1% on higher production estimates
The Malaysian Palm Oil Association on Thursday forecast a 19% monthly rise in March production to 1.35 million tonnes, according to traders. That is higher than a Reuters poll pegging a 16% rise.
Chicago Board of Trade soybean futures firmed on Thursday, supported by downgraded South American production and steady U.S. exports.
Soyoil prices on the Chicago Board of Trade were down 0.1% after a 1.7% overnight gain. Dalian’s most-active soyoil contract rose 1.5%, while its palm oil contract rose 0.1%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Crude oil prices rose but were set to drop around 3% for the week as consuming countries’ planned release of 240 million barrels from emergency stocks offset some concerns over reduced supplies from Russia because of Western sanctions.
Stronger crude futures make palm a more attractive option for biodiesel feedstock.
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