Palm closes lower due to Dalian weakness; market waits for further leads

Malaysian palm oils futures continued to lose money on Monday. This was in line with the decline of rival soyoils at the Dalian exchange, and the market was waiting for further triggers during the holiday season.

At the close, the benchmark contract for palm oil delivery in March on Bursa Malaysia's Derivatives exchange fell 72 ringgit or 1.56% to 4,552 Ringgit ($1,019.48 per metric ton).

A Kuala Lumpur based trader stated that "today's futures are going to be dull, as we will be tracking Dalian and waiting for the holidays to end for more leads."

Dalian's palm oil contract, which is the most active contract, dropped by 0.34% while soyoil prices fell by 0.18%. Chicago Board of Trade soyoil fell 0.13%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.

Oil prices fell on Monday as holiday trading slowed ahead of year-end. Traders awaited economic data from China and the United States later this week in order to gauge growth in these two world's largest oil consumers.

Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

The palm ringgit's trade currency rose by just 0.18% versus the U.S. Dollar, making it slightly more expensive for foreign buyers.

Malaysian palm oil prices dropped between Nov. 1, 1 and 25, according to cargo surveyors. $1 = 4.4665 ringgit (Reporting and editing by Savio d'Souza, Shrey Biswas and Dewi Kurniawati)

(source: Reuters)