JAKARTA: Malaysian palm oil futures fell on Wednesday, snapping two straight sessions of gains, as a lack of major market cues kept sentiment subdued.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange lost 4 ringgit, or 0.09%, to 4,569 ringgit ($1,120.95) a metric ton at closing.
“The futures is trading rangebound, with absent of any major announcement or changes in the market sentiment,” said Paramalingam Supramaniam, director of the Selangor-based brokerage Pelindung Bestari.
Whilst some are pricing in the fear of El Nino, demand remains rather subdued, with uncertainty over the latest development in the Middle East, Supramaniam said.
Dalian’s most-active soyoil contract rose 0.08%, while its palm oil contract was up 0.02%. Soyoil prices on the Chicago Board of Trade were up 0.69%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Indonesia will subsidise diesel fuel for midsize fishing vessels using funds collected from palm oil and cocoa export levies, the government said.
Indonesia’s palm oil exports, including refined products, were at 1.996 million metric tons in May, down 25.1% from last year’s 2.664 million tons, Indonesian Palm Oil Association data showed on Wednesday.
Malaysia has raised its August crude palm oil reference price to a level that maintains the export duty at 10%, a circular on the Malaysian Palm Oil Board website showed on Wednesday.
AmSpec Agri said exports of Malaysian palm oil products for July 1-15 rose 4%, while according cargo surveyor Intertek Testing, it rose 12.4%.
Meanwhile, crude oil extended gains by around 1% as U.S. President Donald Trump reimposed a naval blockade on all Iranian ports and Iran’s Islamic Revolutionary Guard Corps threatened to close “all other export corridors that benefit the U.S. and its allies”.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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