KUALA LUMPUR: Malaysian palm oil futures fell on Tuesday after gaining for two consecutive sessions, as weaker crude oil prices weighed ahead of cargo surveyors’ exports estimates for the month.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange slid 79 ringgit, or 2.02%, to 3,836 ringgit ($804.19) during early trade.
The contract lost 0.69% in overnight trade.
Fundamentals
Cargo surveyors are expected to release Malaysian palm oil exports estimates for April later on Tuesday.
Oil edged down in early trade after Israel-Hamas ceasefire talks in Cairo helped quell market fears of an expanded conflict in the Middle East, while worries about the outlook for US interest rates weighed on the market.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Dalian’s most-active soyoil contract lost 0.65%, while its palm oil contract slipped 1.51%. Soyoil prices on the Chicago Board of Trade were down 1.44%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The Malaysian ringgit, palm’s currency of trade, weakened 0.1% against the dollar, making the commodity less expensive for buyers holding the foreign currency.
Palm oil may revisit its April 25 low of 3,817 ringgit per metric ton, as it failed twice to break resistance at 3,942 ringgit, Reuters technical analyst Wang Tao said.