Malaysian palm oil futures dropped a second day on Friday as the ringgit strengthened and related vegetable oils weakened, with the benchmark contract set for a weekly decline.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange fell 1.79% to 4,005 ringgit ($911.89) a tonne by midday break. For the week so far, it is down 3.26%.
Persisting strength in the ringgit and continued weakness in related oilseeds put pressure on palm oil prices, a Kuala Lumpur-based trader said.
The ringgit rose for a third day against the US dollar, touching its best level since early-June earlier on Friday. A stronger ringgit makes palm oil less attractive for holders of foreign currencies.
Palm oil may retest resistance at 4,329 ringgit
Soyoil prices on the Chicago Board of Trade were down 1.32% on Friday, extending from a day earlier when it posted the biggest drop in a day since July.
The US government proposed smaller-than-expected biofuels blending requirements, which could be made from soyoil. Dalian’s most active soyoil contract fell 2.91%, while its palm oil contract slumped by 3.44%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Meanwhile, sunflower oil’s discount to rival soyoil has widened this week to the highest level in more than 9 months as leading exporters Ukraine and Russia aggressively offered the oil to bring down their stocks, industry officials told Reuters.
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