Palm closes down but gains second week despite lower closing.

Malaysian palm futures fell on Friday as higher inventories put pressure on the market. However, it still recorded a second consecutive week of gains. The benchmark palm?contract for?October delivery?on the Bursa Malaysia derivatives Exchange?was down 13 ringgit or 0.28% at $4,711 ringgit (1,153.53) per metric ton by the close. The contract increased by 0.73% in the past week.

David Ng is a proprietary trader with trading firm 'Iceberg X Sdn Bhd. He said that the prices were pressured due to higher end-July stock and weaker Chicago soybean oil, but worries about El Nino related weather disruptions, and?higher fuel prices, limited losses. Malaysian palm oil stocks reached a five-month peak in July, as production remained above increasing export demand. This was according to data released by the Malaysian Palm Oil Board on Monday.

Dalian's soyoil contract, which is the most active in Dalian, rose 1.04% while palm oil contracts increased by 1.43%. Prices of soyoil on the Chicago Board of Trade were down 0.37%.

Palm oil follows the price movement of other edible oils as it competes to gain a share in the global vegetable oils markets. After the United States threatened a naval blockade against Iran for an indefinite period, oil prices were set to rise and are on track to make weekly gains. This is due to concerns over?disruptions of crude supplies from Middle East.

Palm oil is more attractive as a biodiesel feedstock because crude oil futures are stronger. India's edible?oil?imports reached their highest level in ten months in July, as'refiners' stepped up 'purchases of palm oil and'soyoil' to replenish inventories before the festival season. Solvent Extractors Association of India said. Indonesian President Prabowo said that the new state-owned export company will oversee key commodities and expand its role, but it will not control exports. Prabowo also said that Indonesia 'will operate a commodity and mineral bourse from January 1, next year. This will set the reference prices for Indonesian main commodities.

(source: Reuters)