JAKARTA: Malaysian palm oil futures dropped for a fourth session on Monday due to the absence of fresh destination buying, which hurt market sentiments, despite a tighter supply situation at origins.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange dropped 0.11% to 3,790 ringgit ($860.00) per tonne by the midday break, extending a 4.26% loss over the past three sessions.
“BMD crude palm oil futures opened lower following weakness in Dalian palm olein and soyoil futures and in expectations of a drop in Malaysian palm oil export between April 1-10,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Data released during midday break showed Malaysia’s palm oil inventories at the end of March fell 21.08% from the previous month to 1.67 million tonnes.
Cargo surveyors are expected to release export data for April 1-10 later on Monday. Dalian’s most-active soyoil contract dropped 1.21%, while its palm oil for May delivery was 0.65% lower.
The Chicago Board of Trade rose 0.39%.
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 test a support at 3,740 ringgit per tonne, a break below which could open the way towards a range of 3,683-3,718 ringgit, said Reuters technical analyst Wang Tao.