JAKARTA: Malaysian palm oil futures declined on Thursday after three consecutive sessions of gains as the contract tracked weakness in Dalian vegetable oils and crude oil, while market participants awaited output data.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange lost 34 ringgit, or 0.85%, at 3,954 ringgit ($845.23) a metric ton by midday.
“Profit taking, weakness in crude oil and a lower close in soybean oil on Chicago Board of Trade overnight is weighing on palm futures today,” said Sathia Varqa, senior analyst with Fastmarkets Palm Oil Analytics.
Dalian’s most active soyoil contract fell 1.30%, while its palm oil contract was down 1.04%. The Chicago Board of Trade was closed for Thanksgiving holiday.
Palm oil prices are affected by soyoil prices as they compete for a share in the global vegetable oil market. Market participants await Malaysian Palm Oil Association (MPOA) Nov. 1- Nov. 20 production data that is due this week, Fastmarkets’ Varqa said.
“Expectation is for lower monthly output after four successive monthly rise,” Varqa said. Malaysia has maintained its December export tax for crude palm oil at 8% and raised its reference price, a circular on the Malaysian Palm Oil Board website showed on Thursday. Palm oil may retrace into a range of 3,935 ringgit to 3,953 ringgit per metric ton, following its failure to break a resistance at 4,032 ringgit, said Reuters technical analysts Wang Tao.
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