Palm rises on crude and rival oils; set for first weekly loss in five
JAKARTA: Malaysian palm oil futures traded higher on Friday, tracking soaring crude oil prices and rival edible oils in Dalian and Chicago amid geopolitical concerns, but the market was headed to snap a four-week streak of gains.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained RM76, or 1.98 per cent, to RM3,915 (US$921.50) a metric ton by the midday break.
The contract has lost slightly 0.05 per cent so far this week.
"Today's market is reacting towards Israel's bombing of Iran, resulting in the rise of crude oil," a Kuala Lumpur-based trader said.
Oil prices surged more than 9 per cent on Friday, hitting an almost five-month high after Israel struck Iran, dramatically escalating tensions in the Middle East and raising worries about disrupted oil supplies.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Dalian's most-active soyoil contract rose 1.4 per cent, while its palm oil contract gained 2.12 per cent. Soyoil on the Chicago Board of Trade (CBOT) added 1.43 per cent.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
India's palm oil imports in May rose about 84 per cent month-on-month to 592,888 metric tons, a trade body said on Thursday.
Malaysian ringgit, the palm's currency of trade, strengthened 0.75 per cent against the US dollar, making the contract more expensive for holders of foreign currencies.
Palm oil may break resistance at RM3,927 per ton and rise toward the RM3,962-RM3,998 range, according to Reuters' technical analyst Wang Tao.
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