KUALA LUMPUR: Malaysian palm oil futures fell slightly on Wednesday, weighed by weaker Dalian edible oils and a stronger ringgit, although gains in crude oil and Chicago soyoil capped the decline.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 4 ringgit, or 0.09%, to 4,267 ringgit ($997.43) a metric ton by 0239 GMT.
Palm falls on profit-taking, weaker Chicago soyoil, crude oil
The contract dropped 1.22% in overnight trade.
Fundamentals
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Dalian’s most-active soyoil contract fell 0.77%, while its palm oil contract lost 1.6%. Soyoil prices on the Chicago Board of Trade were up 0.86%.
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Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
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The ringgit, palm’s currency of trade, strengthened 0.12% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
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Oil prices steadied in Asian trading, as traders weighed uncertainty surrounding developments in the Middle East conflict against continued bearish fundamentals.
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Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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Implementation of higher biodiesel mandates in Indonesia, the world’s biggest palm oil producer, is likely to tighten supplies of the vegetable oil, a leading industry analyst said.
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Companies that have paid to source agricultural produce that complies with the European Union’s anti-deforestation law would lose out if the EU decides to delay implementing the legislation by a year, industry groups and traders said.
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Palm oil may extend loss into a range of 4,119 ringgit to 4,152 ringgit per metric ton, as an uptrend from the Sept. 30 low of 3,987 ringgit has reversed, Reuters technical analyst Wang Tao said.
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