Palm falls on overnight weakness in Chicago soyoil, firmer ringgit

JAKARTA: Malaysian palm oil futures extended their decline to the second straight session on Monday, weighed down by softer crude oil and overnight weakness in Chicago soyoil, while a firmer ringgit added to the downside.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange lost 8 ringgit, or 0.2%, to 4,084 ringgit ($1,050.41) a metric ton at closing.

“Palm futures opened lower on spread adjustments against Chicago soybean oil,” a Kuala Lumpur-based trader said, adding, “Upside potential may be capped amid a firmer ringgit.”

The ringgit, palm’s currency of trade, strengthened 0.31% against the dollar, making the commodity more expensive for buyers holding foreign currencies.

Soyoil prices on the Chicago Board of Trade rose 0.73% after losing 1.31% in the previous session. The Dalian Commodity Exchange is closed for the Lunar New Year holidays.

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

Chicago soybean futures slipped from last week’s three-month high, pressured by lingering uncertainty over tariffs following the U.S. Supreme Court struck down President Donald Trump’s sweeping levies.

Exports of Malaysian palm oil products for February 1-20 are estimated to have fallen between 8.9% and 12.6%, according to data from cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia.

Oil prices fell 1% as the United States and Iran moved toward a third round of nuclear talks, easing fears of potential conflict, while a fresh round of tariff hikes by Trump added to the uncertainty over global growth and fuel demand.

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

Palm oil may test a support at 4,064 ringgit per metric ton, a break below which could trigger a fall to 3,999 ringgit.