KUALA LUMPUR: Malaysian palm oil futures fell slightly on Wednesday, weighed by weaker Dalian edible oils and a stronger ringgit, although gains in crude oil and Chicago soyoil capped the decline.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 4 ringgit, or 0.09%, to 4,267 ringgit ($997.43) a metric ton by 0239 GMT.
Palm falls on profit-taking, weaker Chicago soyoil, crude oil
The contract dropped 1.22% in overnight trade.
Fundamentals
Dalian’s most-active soyoil contract fell 0.77%, while its palm oil contract lost 1.6%. Soyoil prices on the Chicago Board of Trade were up 0.86%.
Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
The ringgit, palm’s currency of trade, strengthened 0.12% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Oil prices steadied in Asian trading, as traders weighed uncertainty surrounding developments in the Middle East conflict against continued bearish fundamentals.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Implementation of higher biodiesel mandates in Indonesia, the world’s biggest palm oil producer, is likely to tighten supplies of the vegetable oil, a leading industry analyst said.
Companies that have paid to source agricultural produce that complies with the European Union’s anti-deforestation law would lose out if the EU decides to delay implementing the legislation by a year, industry groups and traders said.
Palm oil may extend loss into a range of 4,119 ringgit to 4,152 ringgit per metric ton, as an uptrend from the Sept. 30 low of 3,987 ringgit has reversed, Reuters technical analyst Wang Tao said.