KUALA LUMPUR: Malaysian palm oil futures closed lower on Thursday on profit-taking and weakness in rival Chicago soyoil, as prices consolidated after a recent uptick.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed 40 ringgit, or 0.99%, lower at 3,994 ringgit ($849.43) per metric ton.
Malaysia palm oil futures were seen lower on profit-taking following weakness in Chicago Board of Trade soyoil futures and an adjustment of prices after a strong rise recently, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group. “The weakness in crude oil and ultra-low sulfur diesel prices is also a concern for palm oil as it has weakened the biofuel margins,” Bagani said.
Dalian’s most-active soyoil contract fell 1.04%, while its palm oil contract lost 1.07%. Soyoil prices on the Chicago Board of Trade were down 1.5%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Oil prices eased on Thursday after resilient US economic activity pointed to borrowing costs staying higher for longer in a potential blow to demand.
At 0630 GMT, Brent futures dipped 26 cents or 0.3% to $83.34 a barrel. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, was unchanged against the dollar.
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