Palm oil drops as crude oil and Dalian palm oil weigh

Malaysian palm oil futures dropped for the second session in a row?on Thursday. Dalian's palmolein prices and crude oil prices weighed on the market, as the benchmark fell?below 4,700 ringgit? level.

By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for October delivery was down 18 Ringgit or 0.38% to 4,679 Ringgit ($1,145.41).

The FCPO midday prices today traded mostly in a sideways direction. The benchmark October contract was unable to maintain the psychological level of 4,700 ringgit, but then narrowed its losses by midday. The trading volume was healthy and supported by rollovers and spreads," said a Kuala Lumpur based trader.

Dalian's most-active palm oil contract fell 0.05%, while the soyoil contract gained 0.19%. The Chicago Board of Trade traded no change in soyoil.

Palm oil monitors the price changes of rival edible oils as they compete for a share of global vegetable oils.

A circular posted on the Malaysian Palm Oil Board's website on Wednesday showed that Malaysia had lowered the crude palm oil price reference for September to a level which maintains the 10% export duty.

The Brazilian Supreme Court ruled on Wednesday that the soy-moratorium agreement is legal. It prohibited companies from purchasing soybeans in areas deforested since '2008. This exempts grain traders and processors of paying compensation to farmers who claimed the pact was a cartel.

Oil prices dropped by more than $1 Thursday, as forecasters reduced global oil demand projections for the year 2026 due to disruptions caused by the U.S./Israeli war against Iran. However, the market was supported by the tight supply from the conflict.

The lower crude oil futures makes?palm less attractive as a?biodiesel source.

The palm ringgit's trade currency, the dollar, has weakened by 0.05%, making it slightly cheaper for foreign buyers.

(source: Reuters)