JAKARTA: Malaysian palm oil futures fell on Tuesday after posting their biggest daily gain since late March, weighed down by weaker Chicago soyoil and crude oil, although gains in Dalian edible oils capped the losses.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 17 ringgit, or 0.37 percent, at 4,517 ringgit (USD1,137.21) a metric ton by the midday break. The contract rose 2.16percent in the previous session, its biggest daily rise since March 30.
“Today’s crude palm oil futures is trading between 4,500 and 4,550 ringgit, tracking external performance to provide further leads,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract gained 0.67percent, while its palm oil contract rose 0.27percent. Soyoil prices on the Chicago Board of Trade were down 0.38percent.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Crude palm oil prices are expected to hold around 4,400 ringgit (USD1,110) per metric ton in June as global biofuel policies support demand, while weather risks add to supply uncertainty, the Malaysian Palm Oil Council said in a statement on Tuesday.
Oil prices fell 2percent in early Asian trade after US President Donald Trump said he had paused a planned attack on Iran to allow for negotiations to end the war in the Middle East.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. Palm oil may test a resistance at 4,584 ringgit per metric ton, a break above which could open the way towards the 4,634-4,669 ringgit range.