KUALA LUMPUR: Malaysian palm oil futures advanced more than 3% on Friday, tracking an overnight rally in prices of rival edible oils, although the contract was on course for a second weekly decline.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 118 ringgit, or 3.62%, to 3,382 ringgit ($733.62) a metric ton by the midday break.
For the week, the contract has slipped 0.03% so far in anticipation of rising production and inventories.
Investors are awaiting Malaysian Palm Oil Board data due on Monday to assess the extent of a climb in May production.
Malaysia’s palm oil production in May is seen rocketing 21% to 1.45 million metric ton, the highest level since last December, a Reuters survey showed on Tuesday.
Indonesia sees the European Union as conducting “regulatory imperialism” with its new deforestation law, but both sides would still engage in talks on a free trade deal, an Indonesian minister said on Thursday.
In related oils, Dalian’s most-active soyoil contract gained 2.6% while its palm oil contract rose 3.4%.
Soyoil prices on the Chicago Board of Trade eased after surging 4% overnight.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The market will be keeping watch on the US Agriculture Department’s World Agricultural Supply and Demand Estimates report due later on Friday, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
US soybean end-stocks are expected to increase while another round of cuts is expected for Argentina’s old crop soybean output, he added.
Palm oil may test a resistance zone of 3,341 ringgit to 3,368 ringgit per metric ton, a break above could lead to a gain into a zone of 3,394 ringgit to 3,432 ringgit, Reuters technical analyst Wang Tao said.
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