Palm drops on weaker rival oils, crude prices

KUALA LUMPUR: Malaysian palm oil futures fell on Wednesday, tracking weakness in rival edible oils as well as crude prices.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange slid 0.4% to 4,950 ringgit ($1,192.20) a tonne in early trade.

Fundamentals

• Dalian's palm oil contract fell 0.1%, while the most active soyoil contract was largely unchanged. Soyoil prices on the Chicago Board of Trade were down 0.4%.

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

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

  • Palm oil may retest a resistance at 5,048 ringgit per tonne, a break above could lead to a gain at 5,187 ringgit, Reuters technical analyst Wang Tao said.