Palm hits near 3-week low tracking weaker rival soyoil
KUALA LUMPUR: Malaysian palm oil futures fell nearly 1 percent on Wednesday, dipping to their lowest in nearly three weeks, as it tracked weaker-performing soyoil on the Chicago Board of Trade and China's Dalian Commodity Exchange.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 0.96 percent at 2,592 ringgit ($602.72) a tonne at the midday break, in line for a second straight session of declines.
Earlier in the session, it hit 2,581 ringgit a tonne, its lowest since May 5. Traded volumes stood at 15,155 lots of 25 tonnes each at noon.
"We are down on external factors," said a futures trader from Kuala Lumpur, referring to related vegetable oils in markets abroad. "But the market is trying to hold in anticipation of better export figures tomorrow."
Export data from cargo surveyors for the May 1-25 period is scheduled for release after 0300 GMT on Thursday. Shipments from Malaysia, the world's second-largest producer of the tropical oil, rose 18-20 percent during May 1-20 versus the corresponding period last month.
Traders forecast a surge in demand during May, as major consumers such as India, Pakistan and the Middle East ramp up palm oil consumption ahead of Ramadan, which begins this week.
The Muslim festival sees day-long fasts, which ends with communal feasting, incurring higher palm oil usage for cooking purposes.
Palm oil may break a support at 2,600 ringgit per tonne and fall to the next support at 2,558 ringgit, according to Reuters market analyst for commodities and energy technicals Wang Tao.
In other related vegetable oils, soybean oil on the Chicago Board of Trade slipped as much as 0.5 percent, while the September soybean oil contract on the Dalian Commodity Exchange shed up to 1.8 percent.
The September contract for palm olein dipped as much as 1.3 percent.
Palm oil prices are impacted by the performance of rival edible oils such as soyoil, as they compete for a share in the global vegetable oils market.