Palm oil falls as Chicago soyoil weakens
Malaysian palm oil futures fell on Monday, ending a five-session winning streak. Weakened soyoil prices and reduced U.S. biofuel demand expectations weighed them down.
By midday, the benchmark contract for?palm?oil delivery in November on the Bursa Derivatives Exchange had fallen 27 ringgit or 0.54% to 4,991 Ringgit ($1,236.01) per metric tonne.
A Kuala Lumpur-based trader reported that the palm market has fallen from its highest levels since December 2024. This was a result of sharp losses in Chicago Soyoil following the announcement by the United States Environmental Protection Agency (EPA) to extend the September 1 deadline to oil refiners for demonstrating compliance with the nation’s biofuel blend laws.
The trader said that "Chicago Soyoil December contract fell more than 2% overnight on Friday and continued its decline by another 2.7% Monday, which weighed on the overall sentiment."
Prices of soyoil on the Chicago Board of Trade fell by 2.73%.
As palm oil competes to gain a share in the global vegetable oils market, it tracks the price changes of its rival edible oils.
Dalian's palm oil contract gained 0.3%, but its most active soyoil contract dropped 0.15%.
Oil prices fell more than $1 per barrel as investors made profits before an announcement is expected from Washington on imposing additional sanctions against Iran, which could further disrupt Middle East supplies.
Palm oil is less appealing as a biodiesel source due to the weaker crude?oil prices.
The palm ringgit's trade currency, the dollar, has weakened by 0.07%, making the commodity slightly cheaper for buyers with foreign currencies.
After failing to break through resistance at 5,037 Ringgit, palm oil could?retrace into 4,901-4.919 ringgit/metric ton.
(source: Reuters)
