Palm rises on strong rival oils, set for fourth weekly gain

Malaysian palm oil futures opened higher on Friday, and were set for a fourth consecutive weekly gain, buoyed by stronger rival edible oils, but weaker crude oil prices capped the rise.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange added RM34, or 0.87 per cent, to RM3,937 (US$930.73) a metric ton in early trade.

The contract has risen 1.11 per cent so far this week.

Dalian’s most-active soyoil contract rose 0.89 per cent, while its palm oil contract added 0.79 per cent. Soyoil prices on the Chicago Board of Trade (CBOT) gained 1.41 per cent.

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

Oil prices slipped but were on track for their first weekly gain in three weeks after US President Donald Trump and China’s Xi Jinping resumed trade talks, raising hopes for growth and stronger demand in the world’s two largest economies.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

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

Chicago soybean extended its climb to the fourth straight session and was set for a weekly gain on expectations of improved US-China trade ties, fuelled by the phone call between the leaders of the two countries.

Asian shares were subdued as investors hunkered down for the all-important US payrolls report, while Tesla suffered huge losses on the very public feud between Trump and billionaire Elon Musk.

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