Palm poised to snap a three-week advantage over weaker rival oils

The market was weighed down by the weakness of rival edible oils, and traders were closing their positions before the long weekend.

At midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange fell 43 ringgit or 0.97% to 4,406 Ringgit ($1,047.80).

This week, the contract has fallen by 2.36%.

A Kuala Lumpur based trader reported that overnight weakness in rival oilseeds had spilled over into palm oil futures. Some market participants may have closed positions before the long weekend.

On Monday, the Malaysian Bourse and Chicago Board of Trade are closed for a holiday.

Dalian's palm oil contract, which is the most active contract, fell by 2.03%. Chicago Board of Trade soyoil prices were down by 0.42%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.

The oil price fell, but is set to rise by a week. This is due to the expectation of lower demand from the U.S. as summer demand ends and the uncertainty surrounding the Russian supply.

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

The palm ringgit's trade currency, the dollar, has weakened by 0.05%, making it slightly cheaper for foreign buyers.

Technical analyst Wang Tao stated that palm oil could bounce back into the range of 4,455-4.475 ringgits per metric ton as wave c ends.

(source: Reuters)