JAKARTA: Malaysian palm oil futures posted on Monday their biggest daily drop since Sept. 28, dragged by weakness in rival edible oils and crude oil, even as cargo surveyor data showed firmer exports in the first 10 days of the month.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange slipped 6.36% to 3,741 ringgit ($847.53) per tonne by the afternoon closing, ending at its lowest since Oct. 14.
Palm was down due to “spillover weakness from the Dalian Commodity Exchange” after a bearish monthly world agricultural supply-and-demand estimates report from the U.S. Department of Agriculture dragged down the commodity market on Friday, said a trader in Kuala Lumpur.
Dalian’s most active soyoil contract dropped 2.06%, while its palm oil contract lost 4.22%, its worst session since late-September.
Soyoil prices on the Chicago Board of Trade fell 1.37%, extending a 2.12% drop from Friday.
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Weaker crude oil prices also contributed to the drop in palm oil, other trader said.
Oil prices fell on Monday, deepening a multi-week decline, as a weakening global economy offset supply woes stemming from the closure of a key pipeline supplying the United States and Russian threats of a production cut.
Palm oil is affected by price movements in other edible oils, as they compete for a share in the global vegetable oils market, while crude oil price affects palm oil’s attractiveness as feedstock for biofuel.
Meanwhile, exports of Malaysian palm oil products for Dec. 1-10 rose 5.6% from the same period a month earlier, cargo surveyor Intertek Testing Services said on Saturday, while AmSpec Agri Malaysia reported a 14.3% increase.
Market participants were also awaiting release of Malaysia Palm Oil Board data due on Tuesday.
A Reuters survey had showed end-November palm oil stocks likely eased from the previous month, while exports were expected to have risen 3%.
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