SINGAPORE: Malaysian palm oil futures were set for their first weekly drop in four even as prices recovered slightly on Friday on the back of a weaker ringgit and gains in rival oils.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 24 ringgit, or 0.5%, to 4,901 ringgit ($1,179.83) a tonne in early trade, after a near 3% drop in the previous session.
“It’s due to overnight gains in external markets and weak ringgit,” a Kuala Lumpur-based trader told Reuters.
Palm oil takes breather from record highs
Chicago Board of Trade soybean futures rose overnight, finding chart support after sharp losses over the past two sessions on higher-than-expected US grain supply forecasts. The soybean oil contract was last down 0.3%.
Meanwhile, the Dalian Commodity Exchange’s most-active soyoil contract rose 0.5%, while its palm oil contract eased 0.7%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The ringgit fell against the dollar after six straight sessions of gains.
A weaker ringgit makes palm more attractive for holders of foreign currencies.
The trader said prospects of weaker exports limited the gains in palm oil.
Exports of Malaysian palm oil products for Oct. 1-10 fell 9.4% from the same period a month earlier, cargo surveyor Societe Generale de Surveillance said on Tuesday.
Lower exports saw palm prices fall this week. The benchmark palm contract is down 0.8% so far this week after three consecutive weeks of gains.
Source: Brecorder
