Palm oil prices fall on a weakening export demand, soft crude oil and soyoil

Malaysian palm oil futures declined on Thursday, after increasing the previous day. The market was pressured by a weakening?soyoil price and lower crude oil prices. By midday, the benchmark 'palm oil' contract for August delivery at the Bursa Derivatives exchange was down 36 ringgit or 0.77% to 4,641 Ringgit ($1,156.49).

Markets traded lower during Asian hours due to weakness in soybean oil, crude oil, and recent softness of crude palm oil demand, according to David Ng, a proprietary trading at Kuala Lumpur based trading firm Iceberg X Sdn. Bhd.

Dalian's?most-active soyoil contract dropped 0.65% while palm oil contract lost 1.19%. Prices of soyoil on the Chicago Board of Trade fell by 0.36%.

Palm oil follows the price movement of rival edible oils as it competes for a share of global vegetable oils. Cargo surveyors estimate that Malaysian palm oils exports for May decreased between 8.8% to 15.5% compared to a month ago. The oil prices fell as the ceasefire between Israel and Lebanon boosted the hopes of a wider deal to end the U.S./Israeli war against Iran. Meanwhile, the U.S. House passed a resolution to limit President Donald Trump's war powers.

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

The ringgit (the currency used to trade palm oil) fell by 0.58% against dollar, making it cheaper for foreign-currency buyers. A?survey revealed that Malaysia's palm oil inventories will rise in May for the second consecutive month, due to a combination of sluggish shipments and lower production. Technical analyst Wang Tao believes that palm oil could retest the resistance level of 4,691 ringgit per ton. A break above this mark would lead to gains up to 4,734 ringsgit.

(source: Reuters)