Palm oil tracks rival oils higher, set for more than 3% weekly gain

08 Mar, 2024

SINGAPORE: Malaysian palm oil futures rose on Friday amid higher edible and crude oil prices, and are headed for a more than 3% weekly gain.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange rose 48 ringgit, or 1.18% to 4,119 ringgit ($878.63) a metric ton in morning trade, the highest intraday price reached since July 27.

It had gained 0.27% during overnight trade.

Malaysian palm oil futures rise

The contract is set for a weekly gain of around 3.6%, fuelled by tight supply and optimism over palm demand.

Fundamentals

  • Dalian’s most-active soyoil contract rose 1.33%, while its palm oil contract gained 0.96%. Soyoil prices on the Chicago Board of Trade increased 0.78%.

  • Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

  • Oil prices rose on Friday, driven by growing demand in the United States and China, the world’s biggest oil consumers, and as the US Federal Reserve gave a positive signal on possibility of rate cuts.

  • Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

  • The Malaysian ringgit, palm’s currency of trade, strengthened 0.32% against the dollar. It rose as much as 0.6% earlier in the session, the highest since Jan. 16.

  • Palm oil may break resistance at 4,106 ringgit and climb into a range of 4,106-4,158 ringgit per metric ton, said Reuters technical analyst Wang Tao.

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