Palm oil prices snap three-week winning streak

Malaysian palm oil futures rose more than 1% on August 28, supported by higher soybean oil prices and concerns over future production. However, prices declined on a weekly basis, ending a three-week winning streak.

The benchmark November contract on Bursa Malaysia Derivatives gained 74 ringgit, or 1.54%, to 4,890 ringgit ($1,206.61) per ton. Despite Friday’s recovery, palm oil lost 2.55% over the week.

The market was supported by gains in competing soybean oil. Dalian’s most-active soybean oil contract rose 1.67%, while its palm oil contract gained 1.1%. Chicago soybean oil futures advanced 2.13%.

Concerns over palm oil production in the medium term provided additional support. According to Iceberg X trader David Ng, prices are supported above 4,800 ringgit per ton, while resistance is seen around 4,950 ringgit.

Meanwhile, weaker crude oil prices remain a bearish factor, as cheaper crude oil makes palm oil less attractive as a biodiesel feedstock. A stronger Malaysian ringgit also adds pressure by making palm oil more expensive for buyers holding other currencies.