JAKARTA: Malaysian palm oil futures rose on Friday and logged its second weekly gain despite higher June stocks, as stronger rival edible oils and a weaker ringgit underpinned the market.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 29 ringgit, or 0.7%, to 4,175 ringgit ($982.35) a metric ton at closing. The contract rose 2.78% for the week.
“Bursa Malaysia crude palm oil futures opened gap higher today following sharply higher Dalian’s refined bleached deodorized palm olein,” said Anilkumar Bagani, commodity research head at Mumbai-based brokerage Sunvin Group.
Dalian’s most-active soyoil contract increased 0.73%, while its palm oil contract gained 0.63%. Soyoil prices on the Chicago Board of Trade (CBOT) fell 0.64%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Malaysian palm oil falls on rising June stockpile
“Malaysia Palm Oil Board data on Thursday was slightly bearish, but the market has ignored it, in view of the delayed shipments from June into July would accelerate the total July palm oil export,” Bagani said.
Malaysia’s palm oil stocks rose 2.41% to an 18-month high of 2.03 million tons at the end of June, industry regulator data showed.
Meanwhile, exports of Malaysian palm oil products during July 1-10 were estimated to have risen between 5.3% and 12% from a month earlier, according to data from cargo surveyor Intertek Testing Services and inspection company AmSpec Agri Malaysia.
Oil prices were stable on Friday on a weaker market outlook for this year by the International Energy Agency (IEA) despite tightness in the prompt market, U.S. tariff concerns and possible further sanctions on Russia.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.12% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Palm oil is likely to break support at 4,134 ringgit per ton and fall towards the 4,072-4,096 ringgit range, Reuters technical analyst Wang Tao said.