Palm set to snap three-week gain on weaker rivals, crude oil

Malaysian palm oil futures were on track to snap a three-week rally on Friday, pressured by weaker rival edible oils and crude oil prices.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange slid RM22, or 0.49 per cent, to RM4,427 (US$1,052.79) a metric ton in early trade.

The contract fell 2.36 per cent so far this week. It will be closed on Monday for a local public holiday.

Dalian’s most-active soyoil contract fell 0.43 per cent, while its palm oil contract shed 1.12 per cent. Soyoil prices on the Chicago Board of Trade were down 0.19 per cent.

Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Oil prices fell but are set for a weekly gain, caught between expectations of lower demand in the US, the world’s biggest oil consumer, as the summer demand period is ending and uncertainty around the availability of Russian supply.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, strengthened 0.09 per cent against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.

Asian stocks edged higher on Friday, riding a tech-driven rally on Wall Street, with investor focus now turning to a key US inflation reading due later in the day for further clues on the Federal Reserve’s rate outlook.

Tags: soyoil, Malaysia, palm oil, futures, benchmark contract