Palm falls on weak rival oils and crude, lack of fundamental signals

JAKARTA: Malaysian palm oil futures extended losses for the second straight session on Tuesday, tracking weaknesses in rival oils in the Dalian and Chicago markets and softer crude oil prices following a lack of fundamental triggers.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange lost 29 ringgit, or 0.73%, to 3,957 ringgit ($944.62) a metric ton by the midday break.

“Market sentiment remains cautious amid broader macro uncertainties, awaiting clearer fundamental signals,” said Darren Lim, commodities strategist at Singapore-based brokerage Phillip Nova.

“Subdued crude and edible oil prices, along with a firmer ringgit against the US dollar, had given pressure to palm oil prices in the lack of fresh fundamental triggers.”

Dalian’s most-active soyoil contract fell 0.15%, while its palm oil contract dropped 0.24%.

Soyoil prices on the Chicago Board of Trade (CBOT) slipped 0.08%.

Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Oil prices edged down on Tuesday, weighed by expectations of an OPEC+ output hike in August and concerns of an economic slowdown driven by prospects of higher US tariffs.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

Indonesia exported 8.3 million metric tons of crude and refined palm oil from January to May, the statistics bureau said on Tuesday.

Indonesia raised its crude palm oil (CPO) reference price to $877.89 per metric ton for July, up from $856.38 per metric ton in June, a trade ministry regulation showed on Monday.

Malaysian palm oil futures lower

Exports of Malaysian palm oil products for June rose 4.3% month-on-month, according to independent inspection company AmSpec Agri Malaysia, while according to Intertek Testing Services, it grew 4.7%.

The ringgit, palm’s currency of trade, strengthened 0.48% against the dollar, making the commodity more expensive for buyers holding foreign currencies.

Palm oil looks neutral in the 3,961-3,996 ringgit per metric ton range and an escape could suggest a direction, Reuters technical analyst Wang Tao said.