JAKARTA: Malaysian palm oil futures dropped on Thursday, dragged down by weakness in vegetable oils on the Chicago and Dalian commodity exchanges after four consecutive sessions of gains, while market participants awaited the export data.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange lost 48 ringgit, or 1.22%, to 3,875 ringgit ($904.74) a metric ton by the midday break.
“Today, CPO futures are taking a break after (the) recent rally… while waiting for the 15-day export data to provide new lead,” a Kuala Lumpur-based trader said.
The contract fell, tracking weaker Chicago soyoil and Dalian vegetable oils, while a stronger ringgit added pressure, the trader said.
Traders are awaiting the export data for the May 1-15 period from surveyors.
Dalian’s most-active soyoil contract dropped 0.63%, while its palm oil contract for June delivery lost 0.67%. Soyoil prices on the Chicago Board of Trade (CBOT) plunged 4.56%.
Palm oil tracks the prices of rival edible oils as it competes for a share of the global vegetable oils market.
Palm oil rises tracking firmer Dalian rivals; stronger ringgit limits upside
Starting May 17, Indonesia will raise its crude palm oil (CPO) export levy to 10% of its CPO reference price from the current 7.5% to finance the country’s increased biodiesel blending mandate.
India’s vegetable oil imports plunged to their lowest in more than four years in April, led by declines in palm oil imports, dragging inventories to their lowest in nearly five years, a leading industry body said.
The Rosario grains exchange raised its estimate for Argentina’s 2024-25 soybean production to 48.5 million metric tons from 45.5 million tons earlier.
Malaysian ringgit, the palm’s currency of trade, rose for a second session on Thursday, strengthening 0.05% against the U.S. dollar, making the contract more expensive for foreign currency holders.
Palm oil FCPOc3 may retest support at 3,921 ringgit per metric ton, a break below which could trigger a fall into the 3,871-3,887 ringgit range.
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