JAKARTA: Malaysian palm oil futures fell on Tuesday on profit-taking, while declines in Chicago soyoil and crude oil prices added further pressure to the benchmark contract.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was down 1.27% at 4,288 ringgit ($1,000.23) a metric ton by midday.
“Crude palm oil futures are down on profit-taking on the back of lacklustre Dalian performance while waiting for a further lead,” a Kuala Lumpur-based trader said, adding that the Dalian contract needs about 800 points to catch up to the benchmark.
The benchmark palm oil contract had hit its highest closing in six months at 4,349 ringgit in the previous session and has gained 8.7% so far in October.
Dalian Commodity Exchange’s soyoil contract rose 0.79% while its palm oil contract was up 2.58% as the market resumed trading after a week-long holiday break.
Soyoil prices on the Chicago Board of Trade slipped 1.73%. Palm oil tracks the price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
Crude oil prices fell on Tuesday as traders booked profits after prices rallied to their highest in over a month in the previous session amid fears that the Middle East could be on the brink of a region-wide war.
Palm falls on weaker Chicago soyoil
Brent crude futures for December were down 1.5% at $79.72 a barrel by 0551 GMT.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Palm oil may test resistance at 4,432 ringgit per metric ton, a break above could open the way towards the range of 4,518 ringgit to 4,571 ringgit, said Reuters technical analyst Wang Tao.
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