Palm falls overnight on weakness in Chicago soyoil; ringgit firmer

Malaysian palm futures continued to fall on Monday. They were weighed down by weaker crude oil, overnight weakness in Chicago soyoil and a stronger ringgit.

By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange had fallen 29 ringgit or 0.71% to 4,063 Ringgit ($1,044.74) per metric ton.

A Kuala Lumpur-based trader stated that "Palm Futures opened lower due to spread adjustments against Chicago Soybean Oil." He added, "Upside may be limited amid a stronger ringgit."

The dollar strengthened by 0.28%, increasing the price of the palm for foreign currency buyers.

The Chicago Board of Trade soyoil price rose by 0.62%, after falling by 1.31% the previous session. Dalian Commodity Exchange will be closed during the Lunar New Year holiday.

Palm oil tracks the price movement of rival edible oils in its competition for a piece of the global vegetable oils markets.

Chicago soybean futures fell from their three-month high last week, weighed down by the uncertainty surrounding tariffs after the U.S. Supreme Court ruled against President Donald Trump's broad levies.

According to data from Intertek Testing Services & AmSpec Agri Malaysia, exports of palm oil products in Malaysia for the period February 1-20 fell between 8.9% - 12.6%.

Oil prices fell by?1% after the United States and Iran agreed to a third round in nuclear talks. This eased fears of a potential conflict. Meanwhile, Trump's latest round of tariff increases added uncertainty about global growth and fuel consumption.

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

A break below 4,064 ringgit could lead to a fall as low as 3,999 ringgit. ($1 = 3.8890 ringgit)

(source: Reuters)