Palm falls to lowest in a week tracking rival oils
KUALA LUMPUR: Malaysian palm oil futures fell to their lowest in a week in early trade on Wednesday, tracking related oils on the Chicago Board of Trade (CBOT) and China's Dalian Commodity Exchange.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange fell 0.9 percent to 2,445 ringgit ($570.40) a tonne at the midday break, in line for a second consecutive day of declines.
It earlier fell to 2,433 ringgit, its lowest since June 14.
Traded volumes stood at 24,822 lots of 25 tonnes.
"Palm fell in light of the plunge in soybean oil overnight," said a futures trader from Kuala Lumpur, referring to the sharp 2.4 percent decline in soyoil futures on the CBOT on Tuesday.
Related edible oils on Dalian also weighed on palm prices, which are seen further declining in July, another trader added.
"After the Eid-al-Fitr holidays, we should see production picking up, demand slowing down and stocks building up," he said, referring to the Muslim festival which marks the end of the fasting month of Ramadan.
Both Eid and Ramadan, which fall in June this year, see higher uptake of palm oil for cooking purposes, as Muslims break day-long fasts with communal feasting.
Palm oil exports typically drop after Ramadan, as buyers stock up on palm oil supplies a month before the festivities begin.
Shipments for the June 1-20 period fell 14-16 percent versus the corresponding period last month, according to data from two cargo surveyors on Tuesday.
Palm oil may test a support at 2,441 ringgit per tonne, a break below which could cause a further loss to the next support at 2,421 ringgit, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.
In other related oils, soybean oil on the Chicago Board of Trade rose 0.2 percent, while the September soybean oil on the Dalian Commodity Exchange lost 0.8 percent.
The September palm olein contract fell 1.8 percent.
Palm oil prices are impacted by the movements of related edible oils such as soyoil, as they compete for a share in the global vegetable oils market.