Palm oil ease ahead of official data; weaker crude oil weighs

KUALA LUMPUR: Malaysian palm oil futures ticked down on Monday, pressured by a drop in crude oil futures as investors awaited August export data and Malaysian Palm Oil Board data due this week.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange slid 27 ringgit, or 0.63%, to 4,247 ringgit ($1,005.80) a tonne during early trade, extending last week's 2% loss.

Palm oil to bounce more to 4,132 ringgit

With no fresh market news to support the bullish trend, the focus was back on movement curbs, rising COVID-19 cases and related vegetable oils, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

Quarantine measures at Chinese ports are reportedly delaying shipments and increasing freight charges, which could cause some short covering at destination markets including India, Bangladesh, Europe and Pakistan, Bagani said.

Oil prices dropped nearly 2% on the back of a rising US dollar and concerns that new pandemic curbs in Asia may set back the global recovery in fuel demand.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

The Malaysian Palm Oil Board (MPOB) is scheduled to announce July supply and demand data on Wednesday, while cargo surveyors are expected to release data on Aug. 1-10 export shipments.

Malaysia's palm oil stockpile at the end of July likely expanded to its highest in 10 months, as a drop in exports offset a decline in production, a Reuters survey showed on Thursday.

Dalian's most-active soyoil contract gained 0.5%, while its palm oil contract rose 0.6%. Soyoil prices on the Chicago Board of Trade were up 0.4%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Bursa Malaysia will be closed on Tuesday for a public holiday.