Malaysian palm oil futures were set to end a three-day rally on Monday, slipping from their highest in more than five months, as a stronger ringgit made the edible oil less attractive to foreign buyers.
Palm oil for October delivery on the Bursa Malaysia Derivatives Exchange fell 0.6% to 2,760 ringgit ($648.95) a tonne in early trade.
The contract rose to a five-and-a-half-month high in the previous session on Friday due to output drop caused by heavy rain.
Prices were dragged by a stronger ringgit, which last rose 0.2% against the dollar, making the edible oil more expensive for holders of foreign currencies.
Also dragging prices is cheaper soyoil on the Dalian Commodity Exchange, which fell 0.8%.
The palm oil contract on the Dalian, however, gained 0.5% while soyoil on the Chicago Board of Trade was up 0.2%.
Two leading industry analysts told Reuters on Friday that palm oil prices will fall by the fourth quarter due to higher output and inventory levels, dampening a rally that sent the tropical oil to a five-month high last week.
Reuters analyst Wang Tao, however, said that palm oil may rise to 2,739 ringgit per tonne, as it has broken a resistance at 2,700 ringgit.
Chicago soybean futures edged higher on Monday, recouping some of last session’s losses, although gains were limited by worsening U.S.-China relations.
Oil prices edged down on Monday as rising coronavirus cases and tensions between the United States and China pushed investors toward safe-haven assets.