Palm tracks Dalian rivals lower, posts second consecutive weekly gain

JAKARTA: Malaysian palm oil futures rose for a second straight week on Friday despite being dragged down by weakness in Dalian vegetable oil prices.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was down 12 ringgit, or 0.26%, at 4,594 ringgit ($1,123.23) a metric ton at closing.

The contract gained 1.79% for the week, while trading in a tight range between 4,575 and 4,608 ringgit per ton on Friday.

“Bursa Malaysia crude palm oil futures opened marginally lower, tracking the mixed performance of competing vegetable oils,” a Kuala Lumpur-based trader said.

“Prices are likely to consolidate within a narrow range as market participants await fresh catalysts,” the trader said.

Dalian’s most-active soyoil contract shed 0.57%, while its palm oil contract declined 0.26%. Soyoil prices on the Chicago Board of Trade increased 1.35%.

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

Oil prices rose by about 2% on Friday after the U.S. and Iran stepped up attacks across the Gulf, with shipping threatened by a potential Red Sea closure on top of the restricted traffic through the Strait of Hormuz.

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

U.S. Climate Prediction Center says El Nino has strengthened over the past month and is forecast to intensify through 2026 and continue through early 2027.

Palm oil still targets its July 9 high of 4,630 ringgit per metric ton, as it seems to have broken the upper trendline, Reuters technical analyst Wang Tao said.