KUALA LUMPUR: Malaysian palm oil futures opened lower on Friday after a seven-session rally, as pressure from weaker crude oil prices and a strengthening ringgit outweighed support from stronger Dalian oils.
Palm hits five-month high on India demand, supply worries
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 25 ringgit, or 0.6%, to 4,127 ringgit ($1,000.24) a metric ton in early trade.
Fundamentals
Oil prices fell for a third day, on course to end the week lower, as investors focused on expectations of higher supplies from Libya and the broader OPEC+ group of oil exporters.
Brent crude futures for November were down 0.45% at $71.28 a barrel, as of 0245 GMT. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.29% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Dalian’s most-active soyoil contract rose 0.1%, while its palm oil contract added 1.06%. Soyoil prices on the Chicago Board of Trade were down 0.37%.
Palm oil tracks price movements in rival edible oils, as they compete for a share of the global vegetable oils market.
Palm oil may test support at 4,120 ringgit per metric ton, a break below which could open the way towards 4,067 ringgit to 4,093 ringgit range, Reuters technical analyst Wang Tao said.
Source: Brecorder
