KUALA LUMPUR: Malaysian palm oil futures fell on Thursday, as investors booked profits and a weakness in the Chicago soyoil contract added to the decline.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 38 ringgit, or 0.91%, to 4,158 ringgit ($987.18) a metric ton at the midday break.
The contract shed 1.14% in overnight trade, after jumping more than 4% on Wednesday.
Malaysian palm oil futures declined today due to profit taking activities after the recent gains yesterday, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
“The decline is also influenced by the overnight weakness in the Chicago soyoil market.”
Soyoil prices on the Chicago Board of Trade fell 0.14%. Dalian’s vegetable oil markets were closed for China’s Golden Week holiday. Palm oil tracks prices of rival edible oils as they compete for a share of the global vegetable oils market.
Oil prices rose as chances of the widening Middle East conflict disrupting crude oil flows from the key exporting region overshadowed a stronger global supply outlook.
Brent crude futures for December were up 1.12% at $74.73 a barrel as of 0450 GMT.
Malaysian palm oil futures higher
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 1.06% against the US dollar, making the commodity cheaper for buyers holding foreign currencies.
The European Commission said it would propose delaying the implementation of a law banning the import of commodities linked to deforestation by a year, following calls from industries and governments around the world.
Palm oil may retrace moderately to 4,120 ringgit per metric ton, before retesting resistance at 4,206 ringgit, Reuters technical analyst Wang Tao said.
Source: Brecorder
