Palm oil falls as US harvest puts pressure on rival oils

KUALA LUMPUR: Malaysian palm oil futures extended losses on Monday, hovering near an 18-day low touched in the previous session, as prices were pressured by a sell-off in rival edible oils due to a rapid progress in the U.S harvest season.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange slid 77 ringgit, or 1.81%, to 4,184 ringgit ($999.04) a tonne during early trade.

Earlier in the session, the contract tumbled up to 5.37%.

Fundamentals

• The market is awaiting the Sept. 1-20 export data by cargo surveyors due later in the day.

  • Favorable weather over the weekend boosted US harvest, while exports remain capped by terminals on the US Gulf Coast that continue to struggle with power outages and hurricane-led damage as the country heads into its busiest export season.

  • Soyoil prices on the Chicago Board of Trade were down 0.9%. The Dalian exchange is closed until Tuesday for a public holiday.

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

• Palm oil may bounce further to 4,323 ringgit per tonne, as it seems to be consolidating within a wedge, Reuters technical analyst Wang Tao said.