Malaysian palm oil futures reversed early losses on Friday, logging a fourth straight weekly rise on higher exports in the first half of July and expectations of a sluggish rise in production.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange closed up 20 ringgit, or 0.49%, to 4,131 ringgit ($981.93) a tonne.
Palm rose 6.1% this week, its longest weekly winning streak since early January.
“Palm oil could sustain at good prices for a while, on concerns about production in top growers, improving exports to major buyers and stronger prices of major competing vegetable oils,” a Singapore-based trader said.
Exports of Malaysian palm oil products for July 1-15 rose 3.8% to 682,426 tonnes from June 1-15, cargo surveyor Societe Generale de Surveillance said on Thursday.
The contract’s previous highs of 4,152 ringgit and 4,162 ringgit, hit during the last two months, are the major psychological resistance to break for the contract to climb higher, the trader said.
Investors are now awaiting production figures to determine the price trend, but there are expectations of July output to be below potential despite the peak production season due to a labour shortage.
Dry weather in the United States and Canada is also curbing soybean and canola yields.
Dalian’s most-active soyoil contract DBYcv1 rose 0.3%, while its palm oil contract DCPcv1 gained 1.8%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
($1 = 4.2070 ringgit)
Source: Reuters (Reporting by Mei Mei Chu; Editing by Shailesh Kuber and David Evans)