JAKARTA: Malaysian palm oil futures extended losses to a third session on Thursday despite strong exports over the August 1-20 period, tracking weakness in Dalian Commodity Exchange vegetable oils.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange lost 36 ringgit, or 0.8%, to 4,462 ringgit ($1,056.85) a metric ton at the close.
“Dalian was weaker this morning session. Our palm November benchmark failed to sustain the 4,500 ringgit psychological mark (and) invited further selling pressure at noon,” a Kuala Lumpur-based trader said.
Dalian’s palm oil contract was down 0.19%, while its most-active soyoil contract lost 0.17%. Soyoil on the Chicago Board of Trade (CBOT) rose 0.47%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Palm extends gains on strong export demand, palm olein prices
Indonesia’s palm oil stocks shrank by 13% on a monthly basis to 2.53 million metric tons by the end of June despite rising output, with exports accelerating, data from the country’s palm oil association, GAPKI, showed on Thursday.
Exports of Malaysian palm oil products in the August 1-20 period rose between 13.6% and 17% from the same period last month, data from cargo surveyor Intertek Testing Services and inspection firm AmSpec Agri Malaysia showed.
Oil prices gained slightly on Thursday as larger-than-expected declines of crude oil and fuel inventories in the U.S., the world’s biggest oil consumer, supported expectations for steady demand.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil may revisit its August 20 low of 4,450 ringgit per metric ton, as a correction from 4,614 ringgit looks incomplete, said Reuters technical analyst Wang Tao.
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