KUALA LUMPUR: Malaysian palm oil futures closed lower on Monday, weighed down by expectations of increased production, while weaker Chicago soyoil also pressured the market.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange fell 2.37% to 3,961 ringgit ($908.49) a metric ton at the close.
Crude palm oil futures declined following weakness in the Chicago soybean oil market and anticipation of higher output in the coming weeks, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
“We see support at 3,900 ringgit and resistance at 4,080 ringgit,” he said. The Malaysian Palm Oil Board is expected to release its April supply and demand data on May 13. A Reuters poll estimated that palm oil stocks likely rose for the first time in six months, while production surged 10.3% from the previous month.
Dalian’s most-active soyoil contract fell 1.54%, while its palm oil contract shed 2.15%. Soyoil prices on the Chicago Board of Trade were down 1.12%. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices were stable as investors weighed up uncertainty over trade talks between the US and China, clouding the outlook for global growth and fuel demand, as well as the prospect of OPEC+ raising supply.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, strengthened 0.23% against the dollar, making the commodity more expensive for buyers holding foreign currencies. Cargo surveyors estimated that exports of Malaysian palm oil products during April 1-25 rose between 13.8% and 14.8%, compared with the same period a month ago.
Comments
Comments are closed for this article.