KUALA LUMPUR: Malaysian palm oil futures rose on Friday and looked set to post a weekly gain ahead of the Lunar New Year festive period, buoyed by strength in Chicago’s soyoil contract and firmer crude oil prices.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 57 ringgit, or 1.47%, to 3,931 ringgit ($823.07) during early trade.
So far, the contract has gained 4.44% for the week.
Palm oil rebounds to close higher ahead of output data
Fundamentals
Soyoil prices on the Chicago Board of Trade were up 0.4%.
Dalian’s vegetable oil markets are closed for a public holiday.
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 in early trade on Friday, on track for weekly gains, with tensions persisting in the Middle East after Israel rejected a ceasefire offer from Hamas.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, fell 0.21% against the dollar, making the commodity less expensive for buyers holding the foreign currency.
The rebound in palm oil prices is likely to be capped by abundant supplies of rival soyoil and sunflower oil, “soft” oils that are available at discounts to tropical palm oil for the first time in more than a year.
Palm oil may retest resistance at 3,925 ringgit per metric ton, a break above which could lead to a gain into the 3,960-3,967 ringgit range, Reuters technical analyst Wang Tao said.
Source: Brecorder
