Palm oil falls for a second session on weak rival oils

JAKARTA: Malaysian palm oil futures dropped for the second consecutive session on Monday, tracking rival vegetable oils on Chicago and Dalian exchanges, though stronger crude prices and a softer ringgit capped losses.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 9 ringgit, or 0.19%, to 4,663 ringgit ($1,142.05) a metric ton at closing. The contract traded in a tight range between 4,642 ringgit and 4,720 ringgit, after dropping 4.61% last week.

A Kuala Lumpur-based trader said the contract was supported by strong crude oil and a weaker ringgit —its currency of trade — “but weak Dalian and Chicago oils cap gains.”

Dalian’s most-active soyoil contract fell 0.84%, while its palm oil contract lost 1.6%. Soyoil prices on the Chicago Board of Trade ticked down 0.24%.

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

Brent crude rebounded more than 3% on Monday after US President Donald Trump rejected a peace deal from Iran to resolve their conflict and reopen the Strait of Hormuz.

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

The ringgit palm’s currency of trade, eased 0.25% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

Palm oil may extend losses into a range of 4,588-4,622 ringgit per ton, as suggested by a projection analysis, Reuters technical analyst Wang Tao said.

Exports of Malaysian palm oil products for September 1-25 likely fell between 15.1% and 24.3% from a month earlier, cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia said.

Indonesia’s palm oil exports in July stood at 3.19 million metric tons, down 9.87% from the same period of last year, palm oil association GAPKI said on Monday.