Palm ends lower tracking Chicago soyoil, profit-taking

JAKARTA: Malaysian palm oil futures fell on Wednesday after three straight sessions of gains, pressured by weaker Chicago soyoil prices and profit-taking.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange (BMDE) lost 8 ringgit, or 0.19%, to 4,178 ringgit ($1,059.87) a metric ton at the close.

“Today’s crude palm oil future is tracking the softer Dalian and Chicago soyoil to take profit after the recent rally and will be trading in the range of 4,150-4,300 ringgit per ton based on current crude prices,” a Kuala Lumpur-based trader said.

Dalian’s most-active soyoil contract gained 0.46%, while its palm oil contract was up 0.22%, after falling as much as 0.49% earlier in the session. Soyoil on the Chicago Board of Trade was down 0.27%.

Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Malaysia’s palm oil stocks likely fell for a second straight month in February, reaching a four-month low, as seasonal output declines outweighed slower exports, a Reuters survey showed.

India’s palm oil imports rose 10.1% in February to a six-month high, as its widening discount to rival oils prompted refiners to ramp up purchases and cut imports of sunflower oil, according to five dealers.

Oil prices rose 3% on Wednesday as the U.S.-Israeli war on Iran disrupted Middle East supplies, but the pace of gains slowed from past sessions after President Donald Trump suggested the U.S. Navy could escort vessels through the Strait of Hormuz.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.