KUALA LUMPUR: Malaysian palm oil futures extended losses to a second session on Monday, tracking weak rival edible oils, while concerns over rising output and inventory levels also pressured prices.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange slid 31 ringgit, or 0.73%, to 4,242 ringgit ($1,005.69) a metric ton at the midday break.
Crude palm oil traded lower due to weakness in the Dalian and the soyoil market during Asian hours, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
“Rising production and stock levels could be seen as weighing down on market sentiment as well,” he said.
Dalian’s most-active soyoil contract fell 0.61%, while its palm oil contract shed 0.89%. Soyoil prices on the Chicago Board of Trade (CBOT) lost 0.32%.
Palm oil tracks the price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
Meanwhile, oil prices rose after the U.S. reached a deal with the European Union and may extend a tariff pause with China, easing concerns that potentially higher levies would limit economic activity and impact fuel demand.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Cargo surveyors estimated exports of Malaysian palm oil products for July 1-25 to have fallen between 9.2% and 15.2% from a month earlier.
The ringgit, palm’s currency of trade, remained unchanged against the U.S dollar.
Palm oil may test support at 4,211 ringgit per metric ton, a break below which could open the way towards 4,161 ringgit, Reuters technical analyst Wang Tao said.