KUALA LUMPUR: Malaysian palm oil futures closed lower on Friday, weighed by weaker rival edible oils at the Chicago and Dalian markets and by profit booking, though the contract still managed to post its seventh weekly gain in eight.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange slid 29 ringgit, or 0.71%, to 4,062 ringgit ($963.02) a metric ton at the close. The contract rose 1.27% this week.
Crude palm oil prices were lower, tracking 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 0.95%, while its palm oil contract shed 0.07%. 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.
Palm up as strong Dalian oils counter weak crude, Chicago soyoil
Oil futures fell slightly after Iran reaffirmed its commitment to nuclear non-proliferation, while major producers from the OPEC+ group are set to agree to raise their output this weekend.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.05% against the dollar, making the commodity slightly expensive 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.
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