JAKARTA: Malaysian palm oil futures rose on Friday and were set to post their second straight weekly gain despite higher June stocks, as stronger rival edible oils and a weaker ringgit underpinned the market.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 37 ringgit, or 0.89%, to 4,183 ringgit ($993.42) a metric ton by the midday break.
The contract has risen 2.98% so far this week.
“Strong gains in Dalian’s refined bleached deodorized palm olein at Asian trading hours boost Bursa Malaysia crude palm oil futures opening,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract increased 0.63%, while its palm oil contract gained 0.86%.
Soyoil prices on the Chicago Board of Trade (CBOT) fell 0.36%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Malaysia’s palm oil stocks rose 2.41% to an 18-month high of 2.03 million tons at the end of June, industry regulator data showed.
Exports of Malaysian palm oil products during July 1-10 were estimated to have risen between 5.3% and 12% from a month earlier, according to data from cargo surveyor Intertek Testing Services and inspection company AmSpec Agri Malaysia.
Oil prices rose on Friday after US President Donald Trump said he would make an announcement regarding Russia, raising the prospect of more sanctions on the major oil producer, while tariff concerns and rising OPEC+ output capped gains. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.24% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Palm oil is likely to break support at 4,134 ringgit per ton and fall towards the 4,072-4,096 ringgit range, Reuters technical analyst Wang Tao said.
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