KUALA LUMPUR: Malaysian palm oil futures snapped a three-week rally on Friday, pressured by weakness in rival edible oils, while traders closed their positions ahead of a long weekend.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange slid 72 ringgit, or 1.62percent, to 4,377 ringgit ($1,040.90) a metric ton at the close. The contract fell 3.36 percent this week.
Overnight weakness in rival oilseeds spilled over to palm oil futures, with some market players possibly closing positions ahead of the long weekend, a Kuala Lumpur-based trader said. The Malaysian bourse and the Chicago Board of Trade will be closed on Monday for a public holiday.
Dalian’s most-active soyoil contract fell 0.38percent, while its palm oil contract shed 1.69 percent. Soyoil prices on the Chicago Board of Trade were down 1.05 percent. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Oil prices fell, but were set for a weekly gain, tugged between uncertainty about Russian supply and expectations of lower demand as the summer driving season in the United States, the world’s biggest fuel consumer, nears its close.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, weakened 0.19 percent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
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