KUALA LUMPUR: Malaysian palm oil futures slipped on Friday and were headed for a second week of losses, weighed down by weak soybean prices and looming demand worries.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange slid 81 ringgit, or 1.7%, to 4,691 ringgit ($1,050.62) a metric ton at the midday break.
The crude palm oil futures opened lower due to weakening soybean oil prices and concerns about weaker demand in the coming weeks, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Dalian’s most-active soyoil contract fell 1.2%, while its palm oil contract shed 0.91%.
Soyoil prices on the Chicago Board of Trade slid 0.14%. Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices soared after Russia said it had fired a ballistic missile at Ukraine and warned of a broadening conflict, raising the prospect of tightening crude supplies.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm extends losses amid China tariff fears, weak demand
The ringgit, palm’s currency of trade, weakened 0.11% against the US dollar, making the commodity cheaper for buyers holding foreign currencies.
Indonesia’s palm oil stocks climbed in September as exports and domestic consumption declined, while output slightly improved, data from the main palm oil industry association GAPKI showed.
Palm oil may retest support at 4,647 ringgit per metric ton, a break below which could open the way towards the 4,510-4,595 ringgit range, Reuters technical analyst Wang Tao said.
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