KUALA LUMPUR: Malaysian palm oil futures extended losses on Thursday for a second consecutive session, weighed down by weaker soyoil prices and concerns over rising production in the weeks ahead.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange slid 73 ringgit, or 1.87%, to 3,821 ringgit ($894.85) a metric ton at the close. Crude palm oil futures were trading lower on weaker soybean oil prices due to a fall in crude oil prices and negative external market sentiment, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Ng added that concerns over rising output in the coming weeks are also pressuring the market. “We see support at 3,800 ringgit and resistance at 3,980 ringgit,” he said.
Dalian’s most-active soyoil contract fell 0.67%, while its palm oil contract shed 1.36%. Soyoil prices on the Chicago Board of Trade were down 3.03%. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices fell more than 1% after a report that OPEC+ is discussing a production increase for July, stoking concerns that global supply could exceed demand growth. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, weakened 0.07% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
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