Palm slips for second session as profit-taking weighs

KUALA LUMPUR: Malaysian palm oil futures ended lower for a second straight session on Wednesday, as traders booked profits, although concerns over El Nino’s impact on production supported the market.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange slid 9 ringgit, or 0.18%, to 4,967 ringgit  ($1,220.99) a metric ton at the close.

The market remains prone to intermittent profit-taking, but the broader trend remains bullish, driven by El Nino 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.

Benchmark Brent crude oil futures rose past $100 a barrel, hitting a more than six-week high and breaching the symbolic threshold for the first time since July 24 as intensifying conflict in the Middle East heightened concerns about oil flows from the region.

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

Dalian’s most-active soyoil contract fell 0.73%, while its palm oil contract shed 1.09%. Soyoil prices on the Chicago Board of Trade were up 0.35%.

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 0.27% 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.