Palm gains on firmer crude, set for weekly decline

Updates with midday close, adds trader comments

Singapore, June 7 (Reuters) – Malaysian palm oil firmed for a second consecutive session on Friday, with higher crude oil supporting prices, although the market is set to end the week in negative territory.

The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange rose 1%, or 40 ringgit, to 4,000 ringgit ($852.33) per metric ton at the end of the morning session. The contract has lost almost 2% this week.

A lack of demand and rising supplies are likely to keep a lid on prices, said a Kuala Lumpur-based trader.

“This 3800-4000 ringgit trading range will continue unless we see really good demand.”

Dalian’s most-active soyoil contract DBYcv1 gained 1.8%, while its palm oil contract DCPcv1 rose almost 2%, although both contracts were down for the week.

Meanwhile, soyoil prices on the Chicago Board of Trade BOcv1 fell 0.5%.

Palm oil prices are influenced by the movements of related oils as they vie for a portion of the global vegetable oils market.

Oil prices ticked higher as reassurances from OPEC+ members Saudi Arabia and Russia indicated readiness to pause or reverse output agreements. O/R

Higher crude oil futures make palm a more attractive option for biodiesel feedstock.

The marketspotlight is on the Malaysian Palm Oil Board’s (MPOB) monthly palm oil data due on June 10. According to a Reuters poll, palm oil inventories by the end of May were seen at 1.75 million metric tons, up 0.39% from April.

The poll projected exports of palm oil products to have surged by 14.32% in the same period to 1.41 million tons.

India’s palm oil imports rose by 12.4% in May on a monthly basis, five dealers told Reuters. India is the world’s biggest importer of vegetable oils.

($1 = 4.6930 ringgit)

Reporting by Ashitha Shivaprasad in Singapore; Editing by Varun H K and Sohini Goswami

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