Palm hits 15-week high on oil and Dalian strength, eyes third weekly gain

JAKARTA: Malaysian palm oil futures rose to a 15-week high on Friday, supported by strong oil prices and a rebound in Dalian’s palm olein futures,and were on course for a third straight weekly gain.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 41 ringgit, or 0.87%, at 4,751 ringgit ($1,161.33) a metric ton By the midday break.

The contract has risen 3.35% so far this week.

“The futures opened gap higher in continuation of the newly triggered bullish rally, following a persistent bullishness in energy prices, a resurgent Dalian’s palm olein futures, perspective tightness in palm oil export from Indonesia due to newly launched B50 biodiesel mandate and fresh demand from China,” said Anilkumar Bagani, commodity research head at Sunvin Group.

Dalian’s most-active soyoil contract gained 0.88%, while its palm oil contract rose 1.33%. Soyoil prices on the Chicago Board of Trade dropped 0.23%.

Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Brazil could more than triple its planted area for producing palm oil over the next decade by expanding cultivation on already deforested land in the Amazon, said Victor Almeida, president of industry association Abrapalma.

The 2026/27 soybean crop in Brazil, set to be sown around September, is expected to fall 2% to 178 million tons from a record last cycle, while challenging market conditions may lead to a stabilisation in the planted area, Rabobank said on Thursday.

Brent oil prices hovered above $100 per barrel on Friday while heading for their fourth week of gains. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Palm oil may extend gains to 4,771 ringgit per ton, as it has cleared resistance at 4,730 ringgit and climbed above a rising channel, Reuters technical analyst Wang Tao said.