Palm slips to one-week low on overnight soyoil weakness

KUALA LUMPUR: Malaysian palm oil futures were in line to chart three straight sessions of losses on Monday after a fall at the midday break, tracking overnight losses in US soyoil and crude oil prices.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was down 0.65 percent at 2,143 ringgit ($512.43) a tonne at the midday break. It earlier fell to 2,132 ringgit, its weakest level since Dec. 18.

Trading volumes stood at 6,721 lots of 25 tonnes each at the midday break.

"Friday's fall in rival oilseed and the energy front stoked a lower opening (for palm)," said a Kuala Lumpur-based futures trader, referring to soyoil on the Chicago Board of Trade and crude oil prices.

Oil prices on Friday had fallen to their lowest in over a year on the back of a global oversupply, despite planned production cuts by the Organization of the Petroleum Exporting Countries.

Palm prices are impacted by movements in crude oil, as it is used as feedstock to make biodiesel.

In other related oils, the Chicago January soybean oil contract dropped over 1 percent on Friday as favourable weather boosted soybean crop prospects in South America, overshadowing support from renewed Chinese buying of US supplies. It was last down 0.1 percent on Monday.

Palm oil prices have been impacted by changes in soyoil prices in recent sessions, as they compete for a share in the global vegetable oil market.

Meanwhile, the January soybean oil contract on the Dalian Commodity Exchange fell 1 percent and the Dalian January palm oil contract declined 1.3 percent.