Palm heads for third weekly gain on strong rival oils

Malaysian palm oil futures were on track for a third straight weekly rise on Friday as the market rebounded from a three-day slide, helped by overnight strength in rival Dalian and Chicago edible oils, and a weaker ringgit.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange gained RM51, or 1.14 per cent, to RM4,511 (US$1,066.93) a metric ton in early trade. The contract has gained 0.85 per cent so far this week.

Dalian’s most-active soyoil contract rose 0.57 per cent, while its palm oil contract was up 0.08 per cent. Soyoil on the Chicago Board of Trade (CBOT) eased 0.49 per cent after surging 4.73 per cent in the previous session.

Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Indian importers for the first time bought palm oil from Colombia and Guatemala as producers sitting on surplus stocks offered cargoes at steep discounts, four trade sources with direct knowledge of the matter said.

India bought canola oil for delivery in August for the first time in nearly five years, as local prices hit a 3-1/2-year high, making overseas purchases lucrative, industry officials told Reuters.

US President Donald Trump’s administration is expected to rule on a growing backlog of requests from small oil refiners seeking relief from US biofuel laws as early as Friday, but will delay a decision on whether larger refiners must compensate by boosting their own biofuel blending, according to two sources familiar with the planning.

Malaysia’s ringgit, palm’s currency of trade, eased 0.14 per cent against the US dollar, making the vegetable oil cheaper for foreign currency holders.

Tags: benchmark contract, soyoil, Malaysia, palm oil, futures