KUALA LUMPUR: Malaysian palm oil futures eased on Tuesday, tracking a slump in crude and rival soyoil, while expectations of higher production amid slowing exports further pulled down trader sentiment.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange slid 11 ringgit, or 0.18%, to 5,967 ringgit ($1,413.98) a tonne by the midday break.
It fell 1.76% overnight.
A millers' association on Monday estimated March 1-25 production rose 15.3% from the month before, traders said.
Exports during the same period fell 5% month-on-month, cargo surveyors said last week.
"Heavy selling in crude oil and soyoil last night added to selling pressure today," a Kuala Lumpur-based trader said.
"Market will be looking out for any bullish data to keep to upside momentum, as most bullish data has been priced in," he added.
Palm falls as crude prices slump, March exports weaken
The Ukraine-Russia crisis has sent commodity prices higher, but a recent correction in the crude palm oil market will likely attract some price-sensitive buyers, Refinitiv Agriculture Research said in a note late on Monday.
However, gains in palm oil prices are also limited by the EU commission's move to safeguard food security at the expense of the biofuel mandate, potentailly hurting demand, Refinitiv said.
Dalian's most-active soyoil contract fell 0.3%, while its palm oil contract gained 0.3%. Soyoil prices on the Chicago Board of Trade were up 0.4%, after declining 3% overnight.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices dropped, extending losses from the previous day as Ukraine and Russia headed for peace talks and on fears of a drop in fuel demand in China after the financial hub of Shanghai shut down to curb a surge in COVID-19 cases.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
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