KUALA LUMPUR: Malaysian palm oil futures slipped on Thursday, tracking weaker soyoil prices, while likely trade talks between the United States and China were also in focus.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange slid 26 ringgit, or 0.58%, to 4,462 ringgit ($1,061.12) a metric ton at the midday break.
The contract rose 0.4% in the previous session.
The market traded lower due to the continuous decline in soyoil prices, as traders closely monitor the upcoming Sino-US trade talks to determine whether China will increase its soybean purchases from the US, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari.
Senior Chinese trade negotiator Li Chenggang is expected to travel to Washington this week to meet US officials, a United States government spokesperson said earlier this week, with the two superpowers looking to chart a path beyond their current tariff truce.
“Weaker-than-expected production in Malaysia this month, as well as robust export demand, is keeping (palm oil) prices supported,” Supramaniam said.
Dalian’s most-active soyoil contract fell 0.48%, while its palm oil contract shed 0.8%.
Soyoil prices on the Chicago Board of Trade were down 0.49%. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Crude oil prices fell as investors weighed the outlook for US fuel demand with the end of the summer driving season near, while assessing potential crude supply shifts as India faces punishing US tariffs for importing Russian oil.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.14% against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.
Palm oil may retest support at 4,455 ringgit per metric ton, a break below could trigger a fall to 4,421 ringgit, Reuters technical analyst Wang Tao said.
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