KUALA LUMPUR: Malaysian palm oil futures traded in a tight range on Monday, hit by weaker soyoil prices and concerns over rising production and inventory levels, while stronger crude oil prices offered some support.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange rose 2 ringgit, or 0.05%, to 3,829 ringgit ($908.42) a metric ton at the close.
Crude palm oil futures were down due to concerns over rising output and 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 1.08%, while its palm oil contract shed 0.97%. The Chicago Board of Trade (CBOT) is closed for a holiday.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
The ringgit, palm’s currency of trade, strengthened 0.31% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Oil prices rose after U.S. President Donald Trump extended a deadline for trade talks with the European Union, easing concerns about U.S. tariffs on the bloc that could hit fuel demand.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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