Palm falls overnight on weakness in Chicago soyoil; ringgit firmer

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

The benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for May delivery lost 8 ringgit or 0.2% to close at 4,084 Ringgit ($1,050.41) per metric ton.

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

The dollar strengthened by 0.31%, increasing the price of the palm for foreign currency buyers.

The Chicago Board of Trade soyoil price rose by 0.73%, 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 oil market.

Chicago soybean futures fell from their three-month high last week, pressured due to lingering uncertainties over tariffs after the U.S. Supreme Court ruled against President Donald Trump's sweeping levies.

According to data from Intertek Testing Services and AmSpec Agri Malaysia, exports of palm oil products from Malaysia for the period February 1-20 fell between 8.9% and 126%.

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 per metric tonne could lead to a fall as low as 3,999 Ringgit. ($1 = 3.8880 ringgit)

(source: Reuters)