Palm oil drops as rival edible oils retreat, vegoils

Malaysian palm oil futures declined for a 2nd session on Wednesday, following the losses of competing edible oils in the Chicago and Dalian exchanges.

At closing, the benchmark?palm oi oil contract on Bursa Malaysia's Derivatives exchange was down 26 Ringgit (0.56%) at $4,632 Ringgit ($1,120.19). The contract fluctuated between 4,622 and 4,690 Ringgit per ton throughout the day.

Kuala Lumpur based trader: "The market will likely remain range-bound as it tracks muted movements in rival vegetable oils and energy markets." Dalian's?most-active soyoil contract was up by 0.37% while the Chicago Board of Trade soyoil price fell by 0.42%. Palm oil, the most active contract on Dalian's exchange, was trading at a 0.46% decrease.

Palm oil follows the price movement of competing edible oils as it competes to gain a share of the global vegetable oils market.

On Wednesday, oil prices dropped more than 1%, continuing this week's losses, and trading near four-month highs. This was on the back of signs that more stranded?oil tanks?in the Gulf will be moving out of the Strait of Hormuz.

Palm oil is less attractive as a biodiesel feedstock due to weaker crude oil futures.

Palm oil could retrace to a range of?4,574 to?4,606 per metric ton. technical analyst Wang Tao said.

(source: Reuters)