SINGAPORE: Malaysian palm oil futures traded sideways on Friday, ahead of a long weekend, as investors mulled over lower rival oil prices and a weaker ringgit.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed up 10 ringgit, or 0.25%, to 3,946 ringgit ($836.55) a metric ton.
The contract, however, dipped 0.73% this week to mark its second week-on-week decline.
Palm oil was seen trading sideways ahead of a long weekend as the Bursa Malaysia Derivatives Exchange will be closed on Monday for the Hari Raya Haji holiday, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
In view of slowing production in Malaysia and rising exports in June, palm prices are expected to get support around 3900 ringgit per ton, but the recovery could get capped around 4150 ringgit per ton, Bagani said.
Dalian’s most-active soyoil contract fell 0.55%, while its palm oil contract lost 0.54%. Soyoil prices on the Chicago Board of Trade edged down 0.8%.
Palm reverses two-day climb on lower Chicago soyoil, crude prices
The U.S. soy processing pace increased in May from a seven-month low a month earlier, as some crush plants resumed operations after seasonal downtime for maintenance and repairs and as margins improved, analysts said ahead of a National Oilseed Processors Association monthly report on Monday.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices eased on Friday as markets evaluated the impact of U.S. interest rates staying higher for longer than anticipated.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The Malaysian ringgit, palm’s currency of trade, weakened 0.26% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.
Comments
Comments are closed.