Malaysian palm oil futures dropped to their lowest in two weeks on Friday, hit by a stronger ringgit and market talk of lower exports. The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was 1.4% lower at 2,027 ringgit ($487.61) per tonne at the close. The futures were down 2% this week. "The market opened higher, tracking the crude oil rally, but ringgit strength has dampened sentiment," said a Kuala Lumpur-based trader.
There were also rumours of lower exports for early June, the trader said. Strength in the ringgit, which is up 0.4% against the U.S dollar, makes palm less attractive for traders holding foreign currencies. Earlier in the day, traders were also squaring their positions ahead of a stockpiles report next week, weighing on the market.
A Reuters palm oil survey of eight respondents showed that Malaysia's end-stocks in May are expected to fall 9.7% to 2.46 million tonnes. In related oils, US Chicago Board of Trade soyaoil was down 0.4%. The Dalian Commodity Exchange was closed on Friday for the Dragon Boat Festival. Palm oil prices are affected by movements in soyaoil, with which it competes for global market share.
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