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Oil Report

VEGOILS-Palm falls over 2% as crude, U.S. soyoil prices drop

(Adds midday prices, milestone)

JAKARTA, Oct 2 (Reuters) - Malaysian palm oil futures were poised on Friday for a second consecutive weekly decline as they extended losses, tracking a drop in crude and Chicago Board of Trade soyoil prices.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange had fallen 2.1% to 2,730 ringgit ($656.57) a tonne by the midday break.

If the losing trend continues, the contract could rack up a second straight weekly fall, with a drop of 3.3%, Eikon data shows.

“Palm oil prices fell in tandem with weak external markets and lower crude oil prices,” a Kuala Lumpur-based trader told Reuters.

CBOT’s soyoil contract fell 1.1%, as farmer selling offset support from Wednesday’s bullish U.S. quarterly stocks report and strong weekly export sales.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Crude oil, which fell over 1% on Friday over worsening demand prospects due to the COVID-19 pandemic, also weighed down prices.

Cheaper crude makes palm oil a less attractive feedstock for biofuels.

Palm oil may revisit its Sept. 30 low of 2,708 ringgit per tonne, as it could have completed a bounce from this level, said Reuters technical analyst Wang Tao.

Reporting by Fathin Ungku; Editing by Vinay Dwivedi

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