KUALA LUMPUR: Malaysian palm oil futures were on track for their best week in more than 16 months, even as the market traded sideways ahead of export data from cargo surveyors on Friday.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange slid 6 ringgit, or 0.13%, to 4,597 ringgit a metric ton in early trade.

The contract has gained 7.92% so far this week, heading for its biggest weekly gain since mid-June 2023 amid expectations of lower production and stockpiles.

Palm surges for fourth day on lower stockpiles, possible production drop

Fundamentals

Cargo surveyors are expected to release later in the day their estimates for Malaysian palm oil exports during the Oct. 1-25 period.

Dalian’s most-active soyoil contract rose 1.66%, while its palm oil contract climbed 1.48%. Soyoil prices on the Chicago Board of Trade were up 0.05%.

Palm oil tracks price movements of rival edible oils, as they compete for a share in the global vegetable oils market.

Oil prices rose and were on track for a weekly gain of more than 1%, as tensions in the world’s top oil-producing region, the Middle East, and a restart in Gaza ceasefire talks in the coming days kept traders on edge.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, weakened 0.07% against the dollar, making the commodity cheaper for buyers holding foreign currencies.

Palm oil may retrace into a range of 4,483 ringgit to 4,518 ringgit per metric ton, following its failure to break major resistance at 4,658 ringgit, Reuters technical analyst Wang Tao said.