Palm slips due to weaker crude and soyoil; robust Demand Limits Fall

Malaysian palm futures declined?for the second consecutive session on Tuesday,?pressured by lower crude oil and soyoil price, but robust demand limited this fall.

At the close, the benchmark "palm oil" contract for October delivery at Bursa Malaysia's Derivatives exchange fell 30 ringgit (0.64%) to 4,643 Ringgit ($1,135.76) per metric ton. The contract has lost 1.67% in the last two sessions.

Paramalingam Supramaniam of Selangor's brokerage Pelindung Bestari said that the crude palm oil futures market was also affected by the selling pressure.

He said that the export numbers for July look promising, but production has barely increased so far.

He added, "I believe this sell-off is going to result in good buying interest both on the local and international markets."

Exports of palm oil-based products from Malaysia for the period July 1-25 increased between 8.1% to 15.9% compared with a month ago, according to cargo surveyors.

Dalian's soyoil contract with the highest volume fell by 1.21% while palm oil contracts dropped by 1.22%. Chicago Board of Trade soyoil prices were down by 1.05%.

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

Oil prices continued their declines, reaching their lowest level in over a week. Traders continue to monitor developments in the Middle East and 'hopes of a resolution in the U.S.Iran conflict' grew.

Weaker crude futures make palm a less appealing option as a?biodiesel source.

The palm ringgit's currency of trade has weakened by 0.15% versus the dollar. This makes the commodity slightly more affordable for buyers who hold foreign currencies.

(source: Reuters)