KUALA LUMPUR: Malaysian palm oil futures ended six weeks of gains with a weekly decline, despite closing higher on Thursday as expectations of lower output and strong demand from key destinations supported the market.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 47 ringgit, or 1.19%, to 4,012 ringgit ($949.36) a metric ton at the close. The contract fell 2.57% this week. The Bursa Malaysia Derivatives Exchange palm oil contract will be closed on Friday for a public holiday.
Crude palm oil futures traded higher on the expectation that production and export would remain bullish in the coming weeks, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
“We see production pace slowing down and robust demand going forward,” he added. The Malaysian Palm Oil Board is expected to release its June supply and demand data on July 10.
Dalian’s most-active soyoil contract rose 0.58%, while its palm oil contract added 0.43%. Soyoil prices on the Chicago Board of Trade were down 0.06%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Oil prices were steady after erasing earlier gains as investors remained cautious about the Iran-Israel ceasefire, while also shifting focus to market fundamentals. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.21% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
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