KUALA LUMPUR: Malaysian palm oil futures fell over 3% on Tuesday as trading resumed after a public holiday, with weakness in rival Dalian contracts and crude oil prices weighing on the market.
Malaysian palm oil rises on export outlook
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange dropped 136 ringgit, or 3.34%, to 3,940 ringgit ($839.73) per metric ton in early trade.
The contract gained 5% last week.
Fundamentals
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Dalian’s most-active soyoil contract fell 1.45%, while its palm oil contract lost 2.03%. Soyoil prices on the Chicago Board of Trade were up 0.32%.
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Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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Oil prices eased in early trade, extending their losses from the previous session when prices fell to their lowest in four months, as investors worried about supply ticking up later in the year.
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At 0243 GMT, Brent crude futures were down 53 cents, or 0.68%, to $77.83 a barrel.
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Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
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The ringgit, palm’s currency of trade, strengthened 0.26% against the dollar, making the commodity more expensive for buyers holding the foreign currency.
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There will be no daily reports from Reuters markets analyst Wang Tao during June 4-17. Routine reports will resume on June 18.
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