JAKARTA: Malaysian palm oil futures fell for a second session on Monday, as traders gauged weakness in Dalian vegetable oils, while a stronger ringgit also added pressure to the contract.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was down 9 ringgit, or 0.24%, at 3,672 ringgit ($837.97) a metric ton, as of 0246 GMT.
Malaysian palm oil futures reverse gains on weaker data
The contract lost 1.79% last week, its fourth consecutive weekly drop.
Fundamentals
Dalian’s most-active soyoil contract lost 0.38%, while its palm oil contract shed 0.27%. Soyoil prices on the Chicago Board of Trade edged 0.51% higher.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysian ringgit, the contract currency of trade, strengthened 1.1% against the US dollar on Monday, hitting its highest since mid-February 2023. A stronger ringgit made the contract less attractive for foreign currency holders.
Indonesia has revised its rules on its palm oil domestic market obligation (DMO) scheme, raising the price cap in a bid to improve supplies of cheap cooking oil, while lowering domestic distribution target to 250,000 tons monthly.
Exports of Malaysian palm oil products for Aug. 1-15 declined 22.3% from the previous month, data from independent inspection company AmSpec Agri Malaysia showed, while Cargo surveyor Intertek Testing Services said exports slumped 20.2% during the same period.
The pace of exports during the period was slower than a decline of 12.2%-17.7% for Aug. 1-10, according to data from the two firms.
Palm oil may revisit its Aug. 14 low of 3,638 ringgit per metric ton, driven by a wave (5), said Reuters technical analyst Wang Tao.
Oil prices eased in early Asian trading on Monday as fears of weaker demand in top oil importer China weighed on market sentiment while investors focus on the progress of ceasefire talks in the Middle East, which could reduce supply risks.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Source: Brecorder
