JAKARTA/KUALA LUMPUR: Malaysian palm oil futures fell for a second session on Thursday, pressured by weaker edible oils in Dalian and Chicago markets and expectations of rising stocks.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange lost 47 ringgit, or 1.13 percent, to 4,106 ringgit (USD999.03) a metric ton at closing. “Weaker rival oilseeds pressured crude palm oil (CPO) futures prices today. Overnight Chicago soyoil dropped nearly 2percent, along with ringgit strength dragged CPO prices lower today,” a Kuala Lumpur-based trader said. Dalian’s most-active soyoil contract fell 0.29percent, while its palm oil contract shed 0.8percent.
Soyoil prices on the Chicago Board of Trade were down 0.08percent. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Expectation of rising stock levels amid subdued export demand also pressured the contract, said Anilkumar Bagani, commodity research head of Mumbai-based brokerage Sunvin Group.
Malaysia’s palm oil inventories likely rose to a more than six-and-a-half-year high in November, as exports slumped amid record production for the month, a Reuters survey showed. The ringgit, palm’s currency of trade, strengthened 0.27 percent against the dollar, making the commodity slightly expensive for buyers holding foreign currencies.
Shipments of US crops to China are accelerating after a tense tariff war had stalled trade for months, with at least six bulk cargo vessels scheduled to load with soybeans at Gulf Coast terminals through mid-December, according to a shipping schedule seen by Reuters.
Palm oil may test support at 4,121 ringgit per ton, following its failure to break resistance at 4,202 ringgit, Reuters technical analyst Wang Tao said.
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