JAKARTA: Malaysian palm oil futures reversed gains on Tuesday, continuing their decline for the sixth straight session, weighed down by weaker rival oils at the Dalian and Chicago markets, while the market focus shifted to the production outlook for May.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange lost 35 ringgit, or 0.91%, to 3,792 ringgit ($896.45) a metric ton at the close.
Dalian’s most active soyoil contract fell 0.49%, while its palm oil contract shed 1.63%. Soyoil prices on the Chicago Board of Trade were down 0.23%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
“The futures opened gap lower but (were) seen recovering steadily as the prices have been almost fully traded for the high production gain scenario during April, and the focus is now on May month performance,” said Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group. The ringgit, the palm’s currency of trade, weakened 0.83% against the US dollar, making the commodity cheaper for buyers holding foreign currencies.
Oil gained more than $1.50 per barrel on Tuesday, rebounding on technical factors and bargain hunting after a decision by OPEC+ to boost output sent prices down the previous session, although concerns about a market surplus persisted.
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