JAKARTA: Malaysian palm oil futures rose on Friday, tracking strength in rival oils, and snapping a five-session losing streak. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange gained 48 ringgit, or 1.30%, to 3,750 ringgit ($803.86) by the midday break.
However, the futures are down 3.20% for the week. “Overnight strong gains in rival oils has prompted futures benchmark contract to open gap up, snapping 5-day negative streak,” a Kuala Lumpur-based trader said.
Another trader said the market is expected to take profits before the weekend, while waiting for the Malaysian Palm Oil Board data scheduled to be published on Dec. 12.
Dalian’s most-active soyoil contract rose 1.82%, while its palm oil contract was up 2.62%. Soyoil prices on the Chicago Board of Trade gained 0.16%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Malaysian ringgit, the contract’s currency of trade, strengthened 0.15% against the US dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.
Indonesia will continue its mandatory 35% biodiesel blending in 2024 and has allocated 13.41 million kilolitres of biodiesel for next year, slightly higher than the 13.15 million kilolitres allotted for 2023. Palm oil is used as feedstock to make biodiesel. Palm oil on the European vegetable oils market rose on Thursday on the back of stronger CBOT soyoil futures and a weaker dollar. Asking prices for palm oil were between $10 and $30 a tonne higher.
Palm oil may climb into a range of 3,781 ringgit to 3,813 ringgit per metric ton, as a wave c from 3,920 ringgit has completed, Reuters’ technical analyst Wang Tao said.
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