Palmetto falls after three sessions on the basis of profit-taking
Malaysian palm futures declined on Wednesday, after reaching a near four-week-high in the previous session. Profit-taking and falling edible oil prices from Dalian and Chicago weighed on the contract.
After three consecutive sessions of gains, the benchmark palm oil contract for?May delivery at the Bursa Derivatives exchange lost 32 ringgit or 0.76% to 4,154 Ringgit ($1,052.18) per metric ton.
Today's crude palm future will track the soft Dalian and Chicago soybean oil to take profits?after the rally. It will trade in the range of 4,150-4300 ringgit per tonne based on the current crude prices, said a Kuala Lumpur based trader.
Dalian's soyoil contract, which is the most active contract in Dalian, gained 0.26%. Its palm oil contract fell 0.04% despite falling by as much as 0.49% during the session. The Chicago Board of Trade Soy Oil contract gained 0.11%, after falling as much as 0.51% in an earlier session.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.
A survey showed that Malaysian palm oil inventories likely dropped for the second consecutive month in February. They reached a four-month high as lower seasonal production outweighed slower exports.
Five 'dealers' claim that India palm oil imports increased 10.1% to reach a six-month record in February, due to the widening of its discount compared to other oils. This led refiners to increase purchases and reduce imports.
The U.S. and Israel war against Iran disrupted Middle East supply, but gains slowed compared to previous sessions as President Donald Trump suggested that the U.S. Navy could escort vessels through the Strait of Hormuz.
Palm oil is a more attractive feedstock for biodiesel due to the stronger crude oil futures.
Technical analyst Wang Tao said that palm oil could test support at?4,121 per ton. A break below this level would trigger a drop into the range of 4,078-4.098 ringgit.
(source: Reuters)
