Palm rises but poised to snap three-week winning streak

KUALA LUMPUR: Malaysian palm oil futures rose on Friday, supported by firmer soyoil prices and worries over future output, though the contract remained on track to snap a three-week winning streak.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 43 ringgit, or 0.89%, at 4,859 ringgit ($1,206.61) a metric ton by the midday break.

The contract has declined 3.41% so far this week.

Palm tracked gains in the soybean oil market and production concerns over the medium term are seen lifting market sentiment, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.

“We see prices supported above 4,800 ringgit and resistance at 4,950 ringgit,” he said.

Dalian’s most-active soyoil contract rose 1.27%, while its palm oil contract added 0.49%.

Soyoil prices on the Chicago Board of Trade were up 2.31%. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Oil prices fell and are on track to snap a two-week winning streak, despite settling higher in the previous session following a report that US President Donald Trump is not interested in returning to previous deal terms with Iran.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, strengthened 0.1% against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.