Palmettos end lower due to weak soyoil and poor export data

Malaysian palm futures ended lower on Monday, reversing gains from the previous session, as weaker export figures and lower soyoil costs weighed down the market.

The benchmark contract for palm oil delivery in October on Bursa Malaysia's Derivatives exchange fell 89 ringgit or 2.06% to 4,226 Ringgit ($998.35).

David Ng, a proprietary trading at Kuala Lumpur's Iceberg X Sdn Bhd, explained that the lower prices of crude palm oil futures were due to a weaker price for soybean oil and also a decline in exports.

Dalian's palm oil contract rose 0.16%, but its most active soyoil contract dropped 0.47%. Chicago Board of Trade soyoil prices were down by 0.79%.

As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.

Exports of palm oil-based products from Malaysia for the period July 1-20 were estimated to have fallen between 3.5% and 7.3% compared to a month ago.

The palm ringgit's trade currency strengthened by 0.26% versus the dollar. This made the commodity more costly for buyers who hold foreign currencies.

The price of oil has dipped slightly. While the European sanctions against Russian oil are expected to have a minimal impact on supply, U.S. tariffs will continue to affect demand.

Palm oil is less appealing as a biodiesel source due to weaker crude oil futures. ($1 = 4.2330 ringgit)

(source: Reuters)