Palm drops more than 1% due to weak export demand and soyoil.
Malaysian palm futures declined more than 1% on Friday, continuing losses for a second straight session. The market was pressured by sluggish export demand and soft soyoil prices.
By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for August delivery had fallen 55 ringgit or 1.2% to 4,528 Ringgit ($1,141.70), a metric tonne.
Exports of Malaysian Palm Oil Products for the period May 1 to 20 fell between 13.9% and 20% from a previous month, according to cargo surveyors.
David Ng, proprietary trader of Kuala Lumpur based trading firm Iceberg?X Sdn. Bhd., stated that the market fell?on concerns about weak export demand combined with weakness in soybean oils.
Dalian's palm oil contract fell 1% while the most active soyoil contract dropped 0.61%. Chicago Board of Trade soyoil prices were down by 0.43%.
Palm oil follows the price movement of other edible oils as it competes to gain a share in the global vegetable oils market. Investors watched the peace talks between 'the U.S.A. and Iran. They also looked at tight supply and U.S. inventory drawdowns.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm currency, the?ringgit MYR= has strengthened by 0.05% against the dollar. This makes the commodity slightly more affordable for buyers who hold foreign currencies. Technical analyst Wang Tao stated that palm oil could test support at a rate of?4,543 per metric ton. A break below this level would open the door for a price as low as 4,502 Ringgit.
(source: Reuters)
