Palm oil prices closed lower on Friday

Weak performance in the market for rival oils and the prospect of profit-taking after recent gains have dampened activity, analysts at Kenanga Futures said in a note. However, they said downward pressure is being mitigated by seasonal production declines in Indonesia and Malaysia and holiday buying, while palm oil’s price discount to soybean oil continues to support demand. Kenanga Futures sees support for palm oil futures at 4,115 ringgit per tonne and resistance at 4,225 ringgit per tonne.

Malaysian palm oil futures fell on Friday on pressure from profit-taking and a stronger ringgit, but still rose for a third straight week.

The benchmark FCPO1 April palm oil contract fell 23 ringgit, or 0.55%, to 4,174 ringgit ($1,042.72) per metric ton on the Bursa Malaysia Derivatives Exchange. The contract has gained 2.5% this week.

Investors were booking profits ahead of the weekend, with the stronger ringgit snapping recent gains, a trader in Kuala Lumpur said.

The ringgit strengthened 0.87% against the dollar, making the commodity more expensive for buyers holding foreign currency.

The most-traded Dalian soybean oil contract rose 0.07%, while the palm oil contract fell 0.04%. Soybean oil prices on the Chicago Mercantile Exchange rose 0.56%.

Palm oil prices are tracking those of competing cooking oils as it battles for share of the global vegetable oil market.

Oil prices rebounded after U.S. President Donald Trump renewed threats against Iran, the Middle East’s largest oil producer, raising fears of military action that could disrupt supplies.

Higher oil futures rates are making palm oil a more attractive feedstock for biodiesel.

Tags: prices, palm oil