Palm oil falls due to weaker soyoil and concerns about rising production, stock levels
Malaysian palm futures declined on Monday as lower soyoil price and concern over increasing production and inventory levels pushed the market.
At midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for August delivery fell 36 ringgit (0.94%) to 3,791 Ringgit ($901.97) per metric ton.
David Ng is a proprietary trader with Kuala Lumpur's trading firm Iceberg X Sdn. Bhd. He said that the decline in prices was due to rising production and stock levels.
Dalian's palm oil contract dropped 0.77%, while the most active soyoil contract declined 0.98%. Chicago Board of Trade is closed on a holiday.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
The palm ringgit's trade currency strengthened by 0.59% versus the dollar. This made the commodity more costly for buyers who hold foreign currencies.
Early Asian trade saw oil prices rise after U.S. president Donald Trump extended deadlines for trade negotiations with the European Union. This eased concerns over U.S. tariffs against the EU that could harm the global economy and fuel the demand.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Technical analyst Wang Tao stated that palm oil was poised to fall below the support level of 3,812 Ringgit per metric tonne and reach 3,768 Ringgit.
(source: Reuters)
