JAKARTA: Malaysian benchmark palm oil futures dropped for a second straight session on Friday as traders booked gains ahead of the weekend following a recent rally, with the contract managing to post a weekly gain.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange fell 1.81% to 4,181 ringgit ($936.39) at close. The contract gained 2.15% for the week.
Palm found support in the Aug. 1-25 export data this week as cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri said on Thursday that exports of Malaysian palm oil products during the period rose between 4.9% and 10%, while Societe Generale de Surveillance reported a 0.1% fall.
“(The contract dropped) more on weekend profit-taking and firmer ringgit,” a trader in Kuala Lumpur said. The ringgit, palm’s currency of trade, strengthened for a third day to its best level in a week, making palm oil less attractive for foreign currency buyers.
In related oils, soyoil prices on the Chicago Board of Trade fell 0.12%, while Dalian’s soyoil contract lost 0.58% and its palm oil contract was down 0.30%. Palm oil is affected by price movements in related oils, as they compete for a share in the global vegetable oils market.
Palm oil is expected to test a support at 4,085 ringgit per tonne, a break below which may open the way towards 3,857 ringgit, Reuters technical analyst Wang Tao said.