KUALA LUMPUR: Malaysian palm oil futures fell on Monday, as weaker soyoil prices and concerns over rising production and inventory levels pressured the market.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange slid 36 ringgit, or 0.94%, to 3,791 ringgit ($901.97) a metric ton at the midday break.
Crude palm oil futures were down due to concerns over rising output and rising stock levels in the coming weeks, while weakness in the soybean oil market also weighed on prices, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Dalian’s most-active soyoil contract fell 0.98%, while its palm oil contract shed 0.77%.
The Chicago Board of Trade (CBOT) is closed for a holiday.
The ringgit, palm’s currency of trade, strengthened 0.59% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Oil prices gained in early Asian trade after US President Donald Trump extended the deadline for trade talks with the European Union, easing concerns about US tariffs on the bloc that could hurt the global economy and fuel demand.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil is poised to break support of 3,812 ringgit per metric ton and fall to 3,768 ringgit, Reuters technical analyst Wang Tao said.
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