Palm oil prices fall, following rival edible oils and crude prices

Malaysian palm oil futures fell for a second time on Wednesday. They followed the declines of rival edible oils traded at 'the Chicago - and Dalian -exchanges.

By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange was down 6 Ringgit or 0.13% at 4,652 Ringgit ($1,124.21).

The contract was trading in a tight range between 4,646 and 4,690 Ringgit per ton during the earlier session.

A Kuala Lumpur based trader stated that the market was likely to remain range-bound due to?muted movements in rival vegetable oil and energy markets.

Dalian's most-active soyoil was up by 0.36% while the soyoil prices on the Chicago Board of Trade remained largely unchanged. Palm oil, the most active contract on Dalian's exchange, was trading at a 0.45% decrease.

As palm oil competes to gain a piece of the global vegetable oil market, it tracks the price movement of its rival edible oils.

On Wednesday, oil prices dropped more than 1%, continuing a week of losses, and trading at near four-month lows. This was due to?signs of more oil tankers that are stranded on the Gulf coast moving out of the Strait of Hormuz.

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

Technical analyst Wang Tao stated that palm oil could retrace to a range between 4,574 to 4,606 Ringgit per metric ton.

(source: Reuters)