Palm tick up on stronger soyoil; still set to snap two-week decline

Palm oil futures in Kuala Lumpur rose on Friday, marking their first weekly gain in three weeks, as higher soyoil prices offset worries about swelling inventories. The benchmark October delivery contract on the Bursa Malaysia Derivatives Exchange increased 5 ringgit, or 0.11%, to 4,666 ringgit ($1,141.95) per metric ton by midday.

The contract has climbed 3.55% this week. Analyst David Ng at Iceberg X Sdn Bhd attributed the rise to Thursday's strong rebound and stronger soybean oil prices. However, concerns over elevated inventories ahead of the Malaysian Palm Oil Board's (MPOB) upcoming demand and supply report might curb further gains, he noted. Malaysia's palm oil stocks are projected to reach an all-time high in September, surpassing the December 2018 peak, due to record production outpacing sluggish export demand, as per a Reuters survey.

The MPOB is set to release its data on Monday. Dalian's top-soyoil contract climbed 0.86%, while its palm oil contract added 1.07%. Soyoil prices on the Chicago Board of Trade surged 0.21%. Palm oil mirrors the price movements of other edible oils, competing for a slice of the global vegetable oils market. Oil prices slipped as Middle East supply concerns eased after US President Donald Trump ruled out attacking Iran before the US midterm elections next month, despite productive talks to resolve the conflict disrupting the market.

A weaker crude oil futures market also made palm a less attractive feedstock for biodiesel. The Malaysian ringgit, palm's trading currency, strengthened 0.05% against the dollar, making the commodity marginally pricier for foreign buyers.