Palm oil falls as Chicago soyoil and crude oil weaken

The price of Malaysian palm oils fell on Tuesday, after posting the biggest daily gain since March. This was due to a weaker Chicago soyoil, and lower crude oil prices, but gains in Dalian edible oils helped limit the losses.

By midday, the benchmark palm oil contract on Bursa Derivatives exchange for August delivery was down 17 Ringgit or 0.37% at 4,517 Ringgit ($1,137.21).

The contract rose by 2.16% during the previous session. This was its largest daily increase since March 30.

A Kuala Lumpur based trader stated that "today's crude palm oil futures are trading between 4,500 to 4,550 ringgit. They track?external performances to provide further lead,"

Dalian's palm oil contract, which is the most active contract, rose by 0.27%. Prices of soyoil on the Chicago Board of Trade were down by 0.38%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.

The Malaysian Palm Oil Council said that the price of crude palm oil is expected to remain at around 4,400 Ringgit ($1,110), per metric ton, in June, as global biofuel policy supports demand while weather risks increase supply uncertainty.

Oil prices dropped 2% in early Asian trade after U.S. president Donald Trump announced that he had stopped a planned strike on Iran to allow for negotiations aimed at ending the Middle East war.

Palm oil is less appealing as a feedstock for biodiesel due to the weaker crude oil futures.

Palm oil could test resistance at 4,584?ringgits per metric tonne. A break above this level would open the door to the range of 4,634-4.669 ringgits.

(source: Reuters)