SINGAPORE: Malaysian palm oil futures fell on Friday amid lower edible and crude oil prices, with the market set for a weekly decline, although a weaker ringgit limited losses.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange fell 21 ringgit, or 0.49% to 4,228 ringgit ($892.36) a metric ton in morning trade.

Malaysian palm oil futures easier

It had slid 0.19% during overnight trade.

The contract is set for a weekly loss of about 1%.

Fundamentals

  • contract was down 0.86%. Soyoil prices on the Chicago Board of Trade lost 0.74%.

  • Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

  • Oil prices sank on the possibility of a nearing Gaza ceasefire, which could ease geopolitical concerns in the Middle East, at the same time a stronger US dollar and faltering US gasoline demand weighed on prices.

  • Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

  • The Malaysian ringgit, palm’s currency of trade, weakened 0.55% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.

  • Palm oil may retrace into the 4,190-4,212 ringgit range again, following its failure to break resistance at 4,326 ringgit per ton, said Reuters technical analyst Wang Tao.

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