JAKARTA: Malaysian palm oil futures snapped a four-month losing streak on Friday, despite closing lower for the day as investors booked profits.
It rose every week in January to book a 4.42% gain, on a boost from higher soyoil and crude prices, supportive output and export data, while the ringgit also slipped.
For the day, the benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was down 88 ringgit, or 2.04%, at 4,229 ringgit ($1,073.62) a metric ton at the close.
“Today’s futures were (on a) weekend profit-taking bout and also tracked weaker Dalian and Chicago soyoil after their recent rally,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract fell 0.84%, while its palm oil contract lost 0.96%. Soyoil prices on the Chicago Board of Trade were down 1%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Losses were, however, capped by a weaker ringgit, palm’s currency of trade, which fell 0.36% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Indonesia has set its crude palm oil reference price at $918.47 per metric ton for February, slightly up from January’s $915.64 per ton, Trade Ministry regulation showed on Friday.
Oil prices slipped more than 1% on Friday from multi-month highs, though they are set for their most substantial gains in years, as the risk premium surged due to a potential U.S. attack on Iran that could disrupt supplies.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
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