KUALA LUMPUR: Malaysian palm oil futures reversed earlier gains to end lower for a second straight session on Thursday, as anticipated higher August inventories, sluggish export demand and soft Chicago soyoil weighed on the market.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange slid 56 ringgit, or 1.13percent, to 4,902 ringgit (USD1,213.82) a metric ton at the close.
The absence of fresh destination buying, coupled with weakness in Chicago soyoil as well as the expectations of a surge in Malaysian palm oil August end-stocks limited gains, said Anilkumar Bagani, commodity research head at brokerage Sunvin Group.
Cargo surveyors estimated that exports of Malaysian palm oil products in August fell between 6.5percent and 14.9percent from a month earlier.
Malaysia’s palm oil inventories are set to rise to a seven-month high in August, driven by the strongest production in nine months and a decline in exports, a Reuters survey showed.
Dalian’s most-active soyoil contract fell 0.13percent, while its palm oil contract shed 0.44percent. Soyoil prices on the Chicago Board of Trade were down 1.89percent.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Oil prices edged lower as investors weighed the uncertainty of renewed military strikes between the US and Iran that risk disrupting supplies from the Middle East.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, strengthened 0.11percent against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.
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