Palm falls on profit-booking ahead of Eid holidays, higher output worries

• The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange fell 31 ringgit, or 1.42pc, to 2,151 ringgit ($494.26) by the midday break.
• Malaysia will restart its nationwide roll-out of the B20 biodiesel programme in September after postponing it due to a two-month coronavirus-driven curbs.

KUALA LUMPUR: Malaysian palm oil futures snapped a three-day winning streak on Wednesday, as investors booked profits in the run-up to the long weekend for Eid celebrations, while concerns of higher output in May also dented sentiment.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange fell 31 ringgit, or 1.42pc, to 2,151 ringgit ($494.26) by the midday break.

Traders are closing long positions ahead of the public holiday on top of concerns of higher production in May, a Kuala Lumpur-based trader said.

The Malaysian bourse will be closed on May 25 and May 26.

Indian buyers have resumed purchases of Malaysian palm oil after a four-month gap following a diplomatic row.

"This is positive as it could help improve Malaysia's crude palm oil exports to India and keep palm oil stocks in check in Malaysia during the peak production period in 2H20 (second half of 2020)," Ivy Ng, regional head of plantations research at CIMB Investment Bank, said in a note.

Malaysia will restart its nationwide roll-out of the B20 biodiesel programme in September after postponing it due to a two-month coronavirus-driven curbs, alleviating concerns that the mandate would be abolished amid low crude prices.

Malaysian palm oil May 1-20 exports rose higher-than-expected, jumping 11.6pc from the previous month, Intertek Testing Services data said after market paused.

Dalian's most-active soyoil contract gained 0.04pc, while its palm oil contract was down 0.04pc. Soyoil prices on the Chicago Board of Trade were trading 0.37pc lower.

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

Palm oil may end its current gains around a resistance at 2,223 ringgit per tonne, as suggested by a gap and a projection analysis, Reuters technical analyst Wang Tao said.