Malaysian palm oil price drops on profit-booking, ringgit and soyoil add pressure

Malaysian palm oil futures rose for a second consecutive session by the close on Friday, climbing by nearly 1 percent and buoyed by expectations of rising demand and tracking gains in palm kernel oil prices.

KUALA LUMPUR: Malaysian palm oil futures fell on Friday as traders took profits from an intra-day high that almost touched the 6-1/2-month high hit in the previous session.

A strengthening ringgit and softer soyoil have also dragged on the tropical oil.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange slid 0.7 percent to 2,762 ringgit ($658.87).

Trading volumes stood at 62,313 lots of 25 tonnes each.

Prices ended up 2.1 percent for the week thanks to the high reached on Thursday when the futures contract rose to 2,782 ringgit a tonne on hopes of the European Union (EU) taking action on anti-dumping duties.

But a futures trader based in Kuala Lumpur said market talk of improved exports for the Sept. 1-10 period failed to push palm prices beyond the high achieved on Thursday.

"Market rumour on exports being higher supported a bounce (in second-half trading) but a failure to test yesterday's high encouraged profit taking," the trader said, adding that softer soybean oil also added pressure to palm.

The Malaysian Palm Oil Board is due to release August production and export data next week on Monday.

The Chicago Board of Trade soybean oil contract fell 0.2 percent.

Another trader said the ringgit's rally, gaining strength for the past four days, continued to weigh on palm.

The ringgit rose another 0.38 percent on Friday. A more expensive ringgit makes palm oil less attractive to buyers of the oil holding foreign currencies.

In related oils, the January soybean oil on the Dalian Commodity Exchange was down 0.19 percent, while January palm olein was down 0.4 percent. - Reuters

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