Palm oil falls to near four-week-low on weak Dalian palm oils, strong ringgit

Malaysian palm futures fell for a second day to their lowest close in almost four weeks, due to Dalian palm and a stronger Ringgit. Market participants were waiting for fresh triggers that would confirm the direction.

At closing, the benchmark palm oil contract on Bursa Malaysia's Derivatives Exchange fell 50 ringgit or 1.13% to 4,372 Ringgit ($1,035.04) per metric ton.

A Kuala Lumpur trader stated that "Today crude palm oil futures are still tracking Dalian's performance while waiting for new market leads such as the weather conditions and (possible improvement) in US-China Trade talks this week."

Donald Trump, the U.S. president, said that China and the U.S. are "coming away with"

a trade deal

, since he will meet the Chinese President Xi Jinping in South Korea later this week.

Dalian's palm oil contract, which is the most active contract in Dalian, lost 0.33%. Chicago Board of Trade soyoil prices rose by 0.77%.

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

AmSpec Agri Malaysia, Intertek Testing Services and AmSpec Agri Malaysia said that the exports of palm oil products from Malaysia for October 1-25 were between 0.3% to 0.4% less than what was shipped in September 1-25.

Oil prices increased after U.S. officials and Chinese officials drew up a framework for a trade deal, assuaging fears that tariffs or export restrictions between the two world's largest oil consumers would dent global growth.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

Palm oil is now more expensive to buyers who hold foreign currencies due to the strengthening of the ringgit (the palm industry's trade currency) against dollars.

Technical analyst Wang Tao says that palm oil is set to fall from its current support level of 4,409 ringgit a ton to 4,346.

(source: Reuters)