JAKARTA: Malaysian palm oil futures closed lower for the second straight session on Tuesday, tracking soyoil weaknesses in the Dalian and Chicago markets and softer crude oil prices following a lack of fundamental triggers.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange lost 16 ringgit, or 0.4%, to 3,970 ringgit ($946.14) a metric ton at the close. “Market sentiment remains cautious amid broader macro uncertainties, awaiting clearer fundamental signals,” said Darren Lim, commodities strategist at Singapore-based brokerage Phillip Nova.
“Subdued crude and edible oil prices, along with a firmer ringgit against the US dollar, had given pressure to palm oil prices in the lack of fresh fundamental triggers.”
Dalian’s most-active soyoil contract fell 0.03%, while its palm oil contract gained 0.29%. Soyoil prices on the Chicago Board of Trade (CBOT) slipped 0.02%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market. Oil prices were steady on Tuesday as investors assessed expectations that OPEC+ will announce an output hike for August at an upcoming meeting as well as trade negotiations. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, strengthened 0.33% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Indonesia’s crude and refined palm oil exports soared 53% in May from a year ago, data from the statistics bureau showed, as the tropical oil started trading at a discount to its rivals, boosting demand from key buyers.
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