Malaysian palm oil futures closed marginally lower on Friday, posting their first drop in three sessions as falls in competing vegetable oils weighed, but found some support from industry data showing lower production and short-covering by traders. The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed 0.04 percent lower at 2,628 ringgit ($656) per tonne.
It gained 1.3 percent this week after last week's 3.6 percent fall, its steepest weekly drop since early October. Palm oil rose in the previous two sessions, posting its sharpest jump in nearly five months on Wednesday as traders covered short positions after four sessions of losses and as the ringgit sunk to a five-week low.
Traded volumes were 55,038 lots of 25 tonnes each, higher than the 2015 daily average of 44,600. "There's some short covering towards the weekend, and production figures from the Southern Palm Oil Millers Association (SPPOMA) are 18 percent lower," said a trader from Kuala Lumpur, referring to data from a Malaysian millers association for the first five days of May. In competing vegetable oils, the September soybean oil contract on the Dalian Commodity Exchange fell 1.3 percent, while the Chicago Board of Trade soyoil contract for July rose 0.5 percent.
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