Palm oil posts second consecutive weekly loss, reaches three-week low

Malaysian palm oils futures ended Friday at a low of three weeks, a second consecutive weekly decline, as Dalian Oils, a weaker competitor, weighed. The focus was also on the demand and supply data from the palm oil board, which is due next week.

The benchmark July palm oil contract on Bursa Derivatives Exchange fell 43 ringgit (0.95%) to 4,498 Ringgit ($1,148.03), the lowest closing since April 17 The contract dropped 1.58% in the past week.

Paramalingam Supramaniam said that the market was largely consolidating, as it awaited the release of data from the Malaysian Palm Oil Board.

On Monday, the MPOB will release its monthly data on demand and supply.

Supramaniam stated that the market expects end-stocks of around 2.3 to 2.5 millions metric tons. Any significant deviation will determine where the market moves next.

Palm tracks the prices of crude oil and edible oils that are rivals.

Dalian's most active soyoil contract dropped 1.26% while palm oil contract lost 0.85%. Prices of soyoil on the Chicago Board of Trade rose 0.5%.

Palm oil is in competition with other edible oils for a share of the global vegetable oil market.

Crude oil prices have pared their early gains a day following renewed fighting near the Strait of Hormuz, which raised questions about the ceasefire agreement between Iran and the United States.

Palm oil is a more attractive feedstock for biodiesel due to the stronger crude oil futures.

The palm?ringgit's currency is now 0.28% weaker against the dollar. This makes the commodity slightly more affordable for foreign buyers. ($1 = 3.9180 ringgit)

(source: Reuters)