KUALA LUMPUR: Malaysian palm oil futures fell on Friday, pressured by weaker rival edible oils at the Chicago and Dalian markets and by profit booking, but remained on track for a seventh weekly gain in eight.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange slid 22 ringgit, or 0.54%, to 4,069 ringgit ($963.08) a metric ton at the midday break.
The contract has risen 1.67% so far this week.
Crude palm oil prices were lower, tracking overnight weakness in soybean oil and Dalian palm olein prices, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
“Profit-taking activities after the recent price rally also affected the market,” he added.
Dalian’s most-active soyoil contract fell 0.92%, while its palm oil contract shed 0.45%.
Soyoil prices on the Chicago Board of Trade lost 0.96%. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices were little changed as a solid US job market bolstered the case for the Federal Reserve keeping interest rates on hold, with investors also awaiting clarity on President Donald Trump’s plans for tariffs on various countries.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.12% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Malaysia’s palm oil inventories likely dropped for the first time in four months in June as production fell unexpectedly while export demand remained robust for the tropical oil, a Reuters survey showed.
Palm oil may fall to 4,047 ringgit per ton as a five-wave cycle from 3,947 ringgit has completed, Reuters technical analyst Wang Tao said.
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