Palm oil falls on rival oil, crude oil

Malaysian palm oil futures fell on Monday due to the weakness of rival edible oils and crude oil on the Dalian Market. The expectation of lower exports from the main producer also weighed on sentiment.

By midday, the benchmark contract for palm oil delivery in August on the Bursa Derivatives exchange had fallen 48 ringgit or 1.07% to 4,438 Ringgit ($1,122.69).

A Kuala Lumpur-based trader stated that "the futures are expected trade lower due to a weaker Dalian and lower crude oil. We also expect lower export data."

Later in the day, cargo surveyors will release their estimates for Malaysian palm oil?products exports from May 1-25.

Dalian's soyoil contract, which is the most active one, fell by 0.97%. Palm oil contracts also dropped 0.78%. The Chicago Board of Trade will be closed for the holiday.

Palm oil monitors?the movements in price of rival edible oils as it competes to gain a share on the global vegetable oils markets.

Oil prices dropped 6% on Monday to two-week lows, amid optimism that the United States was moving closer to a deal with Iran, even though they are still at odds on key issues such as the blockade of the Strait of Hormuz.

The lower crude oil futures prices make palm a less appealing option as a biodiesel feedstock.

Luis Caputo, Minister of Economy, said that Argentina, which is a major global?supplier?of?grains?, would gradually reduce the export taxes it charges on its largest agricultural exports over the next two-year period.

The palm ringgit's currency of trade has strengthened by 0.3% against U.S. dollars, making it more expensive for buyers with foreign currencies.

According to Wang Tao, technical analyst, Palm?oil could retest the support at 4,452 Ringgit per metric tonne. A break below this level would open up a range of 4,394-4.421, ringgit.

(source: Reuters)