SINGAPORE: Malaysian palm oil futures rebounded from a two-day fall on Friday amid declining yields and ample domestic demand, although sell-offs in Dalian rivals capped gains.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange rose RM17, or 0.44 per cent to RM3,891(US$815.04) a metric ton by midday break.
The contract is down about 0.8 per cent for the week.
Yields are still declining and May production numbers may not see a significant increase, while local demand, especially for biodiesel, remains largely intact, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
However, selling pressure regained momentum on Friday amid bearish undertones in the Dalian Commodity Exchange as traders continue to sell their positions in anticipation of further losses in the market, making it "difficult for palm to reverse this sell off, albeit the strong fundamentals", Supramaniam added.
Dalian's most-active soyoil contract fell 0.13 per cent, while its palm oil contract shed 0.24 per cent. Soyoil prices on the Chicago Board of Trade rose 0.68 per cent.
Soyoil rose as dry and hot weather throughout the season in northern Argentina may lead the Buenos Aires grains exchange to reduce its estimate for the country's 2023/24 soybean crop.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices rose as players took stock of the U.S. Treasury secretary's comments that the country's economy is likely in a stronger position than indicated by weak first-quarter data, coupled with supply concerns as conflict continues in the Middle East.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The Malaysian ringgit was largely flat and headed for a 0.1 per cent rise for the week, after three consecutive weekly losses. - Reuters