By Mei Mei Chu
KUALA LUMPUR, April 7 (Reuters) – Malaysian palm oil futures eased on Friday for a second session tracking weakness in Dalian rival oils, although the contract is set for a weekly rise on expectations of tightening supply.
The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange fell 40 ringgit, or 1.05%, to 3,783 ringgit ($859.77) a tonne by the midday break.
For the week, palm has risen 0.58% so far, advancing for a second consecutive week.
Spot month was holding firm reflecting support on physical side, but far months were showing weakness because market sentiment is weak, a Kuala Lumpur-based trader said.
Investors are awaiting Malaysian Palm Oil Board (MPOB) data due on Monday to determine further price direction.
A Reuters’ survey ahead of MPOB data forecast Malaysia’s palm oil inventories tumbling to an eight-month low of 1.77 million tonnes at end-March, as exports soared ahead of the month of Ramadan.
Dalian’s most-active soyoil contract DBYcv1 eased 0.8%, while its palm oil contract DCPcv1 fell 1.4%. The Chicago Board of Trade BOcv1 was closed for a public holiday.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices were little changed on Thursday but posted a third weekly gain as markets weighed further production cuts targeted by OPEC+ and falling U.S. oil inventories against fears about the global economic outlook. O/R
Stronger crude futures make palm a more attractive option for biodiesel feedstock.
($1 = 4.4000 ringgit)
(Reporting by Mei Mei Chu; Editing by Krishna Chandra Eluri)
((Meifong.chu@thomsonreuters.com))
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