SINGAPORE: Malaysian palm oil futures rebounded from a two-day fall on Friday amid declining yields and ample domestic demand, while higher oil prices also supported, although the contract still closed lower for the week.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed up 22 ringgit, or 0.57%, to 3,896 ringgit ($817.63) a metric ton.
The contract lost 0.76% week-on-week. Yields are still declining, and May production numbers may not see a significant increase, while local demand, especially for biodiesel, remains largely intact, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
However, selling pressure regained momentum on Friday amid bearish undertones in the Dalian Commodity Exchange as traders continued to sell their positions in anticipation of further losses in the market, making it “difficult for palm to reverse this sell-off, albeit the strong fundamentals”, Supramaniam added.
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