Palm oil logs first weekly drop in four as outlook, rival oils weigh

JAKARTA, Sept 8 (Reuters): Malaysian palm oil futures posted a weekly drop on Friday, snapping three consecutive weeks of gains, hurt by weakness in rival vegetable oils and expectations of higher ending stock in August.

The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange lost 6 ringgit, or 0.16 per cent, to end at 3,826 ringgit ($818.57) per metric ton, its lowest closing price in nearly four weeks.

The contract plunged for five straight sessions and lost 5.3 per cent for the week.

"Market is under pressure on estimates of a steep rise in Malaysian palm oil August end inventories," said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin Group. The Malaysian Palm Oil Board (MPOB) is due to release its August supply-demand data on Sept. 11.

A supportive estimate of the September 1-5 Malaysian palm oil output and exports could not support the contract from the pressure of losses in rival oils, analysts said.

Dalian's most-active soyoil contract dropped 1.34 per cent, while its palm oil contract fell 1.15 per cent. Soyoil prices on the Chicago Board of Trade were down 0.55 per cent.

Palm oil may drop further to 3,730 ringgit per metric ton, driven by a wave C, said Reuters technical analyst Wang Tao.