Palm oil is gaining ground on rival oils, including edible oils.

Malaysian palm oil futures dropped on Friday as a result of weaker edible oils traded on Dalian and Chicago and crude oil. However, they remained on track to make a weekly gain.

By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for December delivery fell 30 ringgit or 0.61% to 4,906 Ringgit ($1,203.93).

This week, the contract has risen by 1.91%.

A Kuala Lumpur based trader stated that "FCPO futures continued to be in a negative territory on Friday. This mirrored the selling pressure seen across the commodity complex throughout Asian trading hours."

Dalian's palm oil contract lost 1.64%, while the most active soyoil contract dropped 1.56%. Chicago Board of Trade soyoil prices were down by 0.74%.

Palm oil is catching up to rival edible oils as it vies for a piece of the global vegetable oils market.

The trader stated that market participants are closely monitoring an announcement by the Indian government regarding a possible reduction in import duties, which could impact the demand for palm oil from Malaysia.

The oil price fell for the third consecutive day, as concerns about Saudi Arabia's supply disruptions were replaced by a growing Middle East conflict.

Palm oil is less attractive as a biodiesel feedstock due to the weaker crude oil futures.

An analyst on Wednesday said that the palm oil production in Indonesia's main producing region, Kalimantan could fall by 12 to 15 percent in the fourth quarter due to prolonged dry weather conditions and widespread fires.

The palm ringgit's currency of trade gained 0.51% versus the dollar making the commodity more costly for buyers with foreign currencies.

Technical analyst Wang Tao stated that Palm?oil?FCPOc3 could test a support at 4,900 Ringgit per metric ton. A break below this level would open the door for the range of 4,841-4865 Ringgit.

(source: Reuters)