Palm oil and crude Dalian slips due to weak Dalian palm oil
Malaysian palm futures fell on Monday, erasing gains from the previous session, as Dalian palm oil and crude prices declined.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for September delivery had fallen 44 ringgit or 1.1% to $3,967 ringgit (USD $941.39) per metric ton.
A Kuala Lumpur-based broker said, "The futures are tracking the external Dalian palm and crude oil performances while waiting for a new lead."
Dalian's palm oil contract, which is the most active contract in Dalian, dropped by 0.69%. Chicago Board of Trade Soyoil Prices rose by 0.42%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.
Oil prices dropped on Monday, as a easing of geopolitical risk in the Middle East coupled with the prospect of an OPEC+ production increase in August improved expectations of supply amid persistent uncertainty about the outlook for demand.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
The palm ringgit's trade currency strengthened by 0.28% against dollars, increasing the price of the commodity for buyers who hold foreign currencies.
Exports of Malaysian Palm Oil Products for the period June 1-25 rose between 6.6% to 6.8% on a monthly basis, according to cargo surveyors.
A circular posted on the Malaysian Palm Oil Board's website revealed that Malaysia had lowered the crude palm oil price reference for July, which reduced the export duty from June to 8.5%.
Technical analyst Wang Tao stated that palm oil could break through resistance at 4,017 Ringgit per metric tonne and move up to the range of 4,049-4.066 Ringgit.
(source: Reuters)
