Palmetto falls due to profit-taking; palmetto heads for weekly gains

Malaysian palm futures continued to lose money on Friday as investors took profits before the weekend. They also tracked declines in the Dalian, Chicago and other exchanges. Prices were still on course for a 4th consecutive weekly gain.

By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for April delivery was down 69 Ringgit or 1.6% at 4,248 Ringgit ($1,079.54) per metric ton.

Futures are up 1.75% per week so far.

A Kuala Lumpur based trader stated that "today's futures (were) on a weekend profit-taking spree and also tracked weaker Dalian soyoil and Chicago soyoil following their recent rally."

Dalian's palm oil contract, which is the most active contract in Dalian, lost 1.11% while soyoil prices fell by?1.2%. Prices for soyoil on the Chicago Board of Trade fell 0.8%.

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

The ringgit, the palm currency of trade, fell by?0.25% to the dollar. This made the commodity more affordable for buyers who held foreign currencies.

Oil prices fell more than 1% on Friday, from multi-month peaks, but they are still set to make their biggest gains in years as the risk premium soared because of a possible U.S. strike against?Iran, which could disrupt supply.

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

Technical analyst Wang Tao stated that palm oil FCPOc3 could retest "resistance" at 4,343 Ringgit per metric tonne, after a slight correction to the range of 4,272 to 4,299 Ringgit.

(source: Reuters)