JAKARTA: Malaysian palm oil futures extended losses on Tuesday, snapping three straight sessions of gains, dragged down by a decline in rival soyoil in the Chicago market as well as profit taking actions.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange lost 19 ringgit, or 0.46%, to 4,075 ringgit ($961.54) a metric ton by the midday break.
“The futures today is on profit taking mode after recent rally tracking the Dalian and CBOT soyoil sentiment,” a Kuala Lumpur-based trader said.
Soyoil on the Chicago Board of Trade (CBOT) was down 0.83%. Dalian’s most-active soyoil contract was up 0.63%, while its palm oil contract rose 1.29%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
US soyoil futures hit their highest in 20 months on Monday, supported by US biofuel blending proposals that are likely to increase demand, while soybean futures touched a one-month high before paring gains.
Oil prices climbed on Tuesday on concerns that the Iran-Israel conflict may intensify, raising the risk of further unrest and the potential disruption of oil supply from the Middle East, a key producing region.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil up on Chicago soyoil gains
Cargo surveyor Intertek Testing Services said exports of Malaysian palm oil products for June 1-15 rose 26.3% compared to May 1-15, while according to independent inspection company AmSpec Agri Malaysia the shipments rose 17.8%.
Palm oil may test support of 4,042 ringgit per metric ton, a break below which could open the way toward 3,998 ringgit.
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