KUALA LUMPUR: Malaysian palm oil futures reversed gains to close lower on Monday for the second consecutive session, weighed by weaker soyoil though expectations of declining inventories in the coming weeks limited the losses.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange eased 12 ringgit, or 0.27percent, to 4,384 ringgit (USD1,040.84) a metric ton at the close. The contract fell 0.97 percent in the previous session.
Crude palm oil futures ended lower on weaker soybean oil prices, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
“The downward price pressure is also being kept at bay with expectations of lower stocks in the coming weeks,” Ng added. The Malaysian palm oil board is expected to release its September demand and supply data on October 10.
Cargo surveyors are also expected to release their full September export estimates on Tuesday. Dalian’s most-active soyoil contract fell 0.51 percent, while its palm oil contract shed 0.35 percent. Soyoil prices on the Chicago Board of Trade were down 0.9 percent. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices dropped after Iraq’s Kurdistan region resumed crude oil exports via Turkey over the weekend, coupled with OPEC+ plans for another oil production hike in November, adding to global supplies. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
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