Palm extends its losses for a second day due to weak soyoil and concerns about output

Malaysian palm futures continued to fall on Thursday, for the second session in a row. This was due to lower soyoil and rising production concerns.

The benchmark contract for palm oil delivery in August on Bursa Malaysia's Derivatives exchange fell 73 ringgit or 1.87% to $3,821 ringgit (US$894.85) per metric ton.

David Ng said that the price of crude palm oil futures was lower due to a drop in crude oil and a negative external market sentiment.

Ng also added that market pressure is being exerted by concerns about the increase in production expected over the next few weeks.

He said, "We see support for 3,800 ringgits and resistance to 3,980 ringgits."

Dalian's palm oil contract, which is the most active contract, fell by 1.36% while soyoil prices dropped 0.67%. Chicago Board of Trade soyoil prices were down by 3.03%.

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

The oil price fell by more than 1% following a report stating that OPEC+ was discussing a production boost for July. This report stoked fears that the global supply might exceed the growth in demand.

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

The palm ringgit's trade currency has weakened by 0.07% against US dollars, making it slightly cheaper for foreign buyers. ($1 = 4.2700 ringgit)

(source: Reuters)