SINGAPORE: Malaysian palm oil futures rebounded on Friday after declining for two sessions, tracking gains in rivals soyoil and crude oil, but the market is poised for a weekly loss.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange rose 21 ringgit, or 0.54% to 3,895 ringgit ($815.71) a metric ton as of 0245 GMT.
Malaysian palm oil futures easier
It fell 0.62% during overnight trade. The contract is down about 0.8% for the week.
Fundamentals
Dalian’s most-active soyoil contract fell 0.29%, while its palm oil contract shed 0.41%. Soyoil prices on the Chicago Board of Trade rose 0.48%.
Soyoil rose as dry and hot weather throughout the season in northern Argentina may lead the Buenos Aires grains exchange to reduce its estimate for the country’s 2023/24 soybean crop.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The Malaysian ringgit, palm’s currency of trade, weakened 0.04% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.
Oil prices rose as players took stock of the US Treasury secretary’s comments that the country’s economy is likely in a stronger position than indicated by weak first-quarter data, coupled with supply concerns as conflict continues in the Middle East.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil may slide into a range of 3,760 ringgit to 3,787 ringgit per ton, driven by a wave (5), said Reuters technical analyst Wang Tao.