Palm extends its losses on weaker crude and soyoil, while robust demand limits the fall

The?market for Malaysian palm oil futures continued to decline on Tuesday as weaker crude oil and soyoil price pressures weighed down the?market. However, robust demand limited the 'decline. By midday, the benchmark palm 'oil 'contract for October delivery at the Bursa Derivatives exchange had fallen 44 ringgit (0.94%) to 4,629 Ringgit ($1,133.45). The contract has lost almost 2% in the last two sessions.

Paramalingam Supramaniam is the director of Selangor brokerage 'Pelindung Bestari'. He said that the palm oil futures market has also been affected by the selling pressure. He said that July's export numbers look promising, but production has barely increased.

He added, "I believe this sale-off will result in good interest in both the local and export markets." Exports of Malaysian Palm Oil Products for the period July 1-25 increased between 8.1% to 15.9% compared to a month ago, according cargo surveyors.

Dalian's soyoil contract with the highest volume fell by 1.22% while palm oil contracts dropped by 1.29%. Prices of soyoil on the Chicago Board of Trade fell by 0.69%.

Palm oil follows the price movement of other edible oils as it competes to gain a share of the global vegetable oils markets. The oil prices continued to fall,?down?over $1 a barrel on Tuesday amid hopes of a resolution in U.S.-Iran War.

Palm is less appealing as a biodiesel source due to weaker crude oil futures. The palm currency, the?ringgit, MYR= has weakened by 0.02% to the dollar. This makes the commodity cheaper for buyers who hold foreign currencies. Technical analyst Wang Tao stated that palm oil could fall between 4,625-4642 ringgits per metric tonne, after it broke a support level of 4,665 ringgit.

(source: Reuters)