Palm slips due to weak crude and soyoil, lack of fundamentals
The price of Malaysian palm oil futures fell for the second consecutive session on Tuesday. This was due to the weakness in soyoil prices at the Dalian and Chicago exchanges and the lack of any fundamental triggers.
The benchmark palm-oil contract for September delivery at Bursa Malaysia's Derivatives exchange lost 16 ringgit or 0.4% to $3,970 ringgit (US$946.14) per metric ton.
"Market sentiment is cautious due to macro-uncertainties, and we are awaiting more clear fundamental signals," said Darren Lim. He is a commodities strategist with Singapore-based Phillip Nova.
In the absence of new fundamental triggers, palm oil prices were under pressure due to the low crude and edible oil price, as well as a stronger ringgit relative to the U.S. Dollar.
Dalian's most active palm oil contract grew by 0.29%, while the soyoil contract dropped 0.03%. Chicago Board of Trade Soyoil Prices fell 0.02%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
The oil prices were stable on Tuesday, as investors assessed the expectations that OPEC+ would announce a production hike for August during an upcoming meeting. They also considered trade negotiations.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
The palm ringgit's trade currency strengthened by 0.33% against dollars, increasing the price of the commodity for buyers who hold foreign currencies.
The statistics bureau reported that Indonesian crude palm oil and refined palm oils exports increased by 53% from a previous year in May. This was because the tropical oil began trading at a lower price than its competitors, which boosted demand from major buyers.
Indonesia increased its crude palm oil reference price for July to $877.89 a metric tonne, up from $856.38 metric tons in June.
According to AmSpec Agri Malaysia and Intertek Testing Services respectively, exports of palm oil products from Malaysia grew by 4.3% in June compared to the previous month. $1 = 4.1940 ringgit (Reporting and editing by Janane Venkatraman, Sumana Niandy).
(source: Reuters)
