Palm oil prices rise amid high crude and soybean oil prices

Palm oil prices rose amid strong crude and soybean oil prices amid the ongoing conflict in the Middle East, says David Ng, a Kuala Lumpur-based trader at Iceberg X. Ng believes prices could find support above 4,580 ringgit per tonne and face resistance at 4,700 ringgit per tonne. The June delivery contract on the Bursa Malaysia Derivatives exchange rose 47 ringgit to 4,630 ringgit per tonne.

Malaysian palm oil futures rose for the fourth consecutive week on Friday after losses earlier in the week, helped by a weaker ringgit. However, uncertainty over the Middle East war and the oil price outlook limited gains.

The benchmark FCPO1 palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 47 ringgit, or 1.03%, to 4,630 ringgit (US$1,154.04) per metric tonne at the close of trading. The contract has gained 0.41% this week.

The market is pricing in uncertainty surrounding the war and the future direction of oil prices, while the weakening ringgit is providing additional support, said Paramalingam Supramaniam, director of Selangor-based brokerage Pelindung Bestari.

The most active Dalian soybean oil contract rose 1%, while the CPO1 palm oil contract rose 2.13%. Soybean oil prices on the Chicago Mercantile Exchange rose 0.43%.

Palm oil prices are tracking the price movements of competing edible oils as it fights for share in the global vegetable oil market.

Oil prices looked set to decline this week after US President Donald Trump extended the suspension of attacks on Iranian energy facilities for 10 days, though investors remained tense as a quick resolution to the conflict seemed unlikely.

Weaker oil futures are making palm oil a less attractive option for biodiesel feedstock.

The ringgit, the currency used for palm oil trading, weakened 0.5% against the dollar, making the commodity cheaper for buyers holding foreign currency.

Malaysia, a leading palm oil exporter, is taking steps to bolster fertilizer supplies after the Middle East conflict and Chinese export restrictions led to higher commodity prices and a domestic supply shortage, the government said.

Tags: prices, palm oil