KUALA LUMPUR: Malaysian palm oil futures opened higher on Friday, tracking the strength of rival edible oils, but a stronger ringgit and weaker crude oil prices capped its gains.
Malaysian palm oil slides on profit-taking
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 74 ringgit, or 1.75%, to 4,307 ringgit ($1,005.60) a metric ton during early trade. The contract has gained 0.07% for the week so far.
Fundamentals
- Dalian’s most-active soyoil contract rose 0.95%, while its palm oil contract climbed 1.31%. Soyoil prices on the Chicago Board of Trade were up 0.32%.
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Palm oil tracks the price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
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The ringgit, palm’s currency of trade, strengthened 0.14% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
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Oil eased on Friday after a rally the previous day, but prices remained set for a second straight weekly gain as investors weighed the impact of hurricane damage on US demand against any broad supply disruption if Israel attacks Iranian oil sites.
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Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
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Cargo surveyors estimate exports of Malaysian palm oil products rose between 13.6% and 18.9% during Oct. 1-10, compared with the same period a month ago.
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Palm oil looks neutral in a range of 4,206 ringgit to 4,293 ringgit per metric ton, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.
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