Palm extends losses for second session as profit-taking weighs

KUALA LUMPUR: Malaysian palm oil futures extended losses for a second straight session on Wednesday, pressured by profit-taking, although concerns over El Nino’s impact on production offered some support.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange slid 15 ringgit, or 0.3%, to 4,961 ringgit ($1,220.12) a metric ton by the midday break.

The market remains prone to intermittent profit-taking, but the broader trend remains bullish, driven by El Niño factors and the anticipated lack of rainfall, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari.

“The market is also waiting for Malaysian Palm Oil Board (MPOB) data for a clearer picture,” he said. MPOB is expected to release its August supply and demand data on Thursday.

Oil prices rose for the fourth straight session, gaining more than $1 in early trade on Wednesday after renewed attacks across the Middle East heightened worries about supply disruptions.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Dalian’s most-active soyoil contract fell 1.15%, while its palm oil contract shed 1.39%.

Soyoil prices on the Chicago Board of Trade were down 0.07%. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

The ringgit, palm’s currency of trade, weakened 0.22% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

Indonesia used 10.7 million kilolitres of palm oil-based biodiesel from January to early September, as it rolled out the B50 blend nationwide, an Energy Ministry presentation at a parliament hearing showed.

Palm oil may test a support at 4,930 ringgit per metric ton, a break below may trigger a fall into the 4,876-4,903 ringgit range, Reuters technical analyst Wang Tao said.