Palmetum falls for third consecutive session due to weaker soyoil and expected bearish MPOB data

Malaysian palm oil futures fell more than 1% Thursday, continuing a trend of 'losses' for the third session in a row. This was due to a combination of a weakening soyoil and an expected decline in demand and supply.

At midday, the benchmark palm oil contract on Bursa Derivatives exchange for November delivery fell 66 ringgit or 1.33% to 4,900 Ringgit ($1,207.19).

According to David Ng, an Iceberg X Sdn. Bhd. proprietary trader, the market fell primarily due to lower soybean oil prices, and the expectation of a Malaysian Palm Oil Board report that was largely negative.

Later in the day, Malaysian Palm Oil Board will release their August demand and supply data.

Later in the day, cargo surveyors will also release their estimates of palm oil exports for the period September 1-10.

Brent crude oil prices remained stable after Brent crude breached $100 per barrel. Traders were bracing themselves for further supply disruptions, as Iran and the United States launched some of their most aggressive attacks against shipping since their six month conflict began.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

Dalian's soyoil contract with the highest volume fell by 0.95% while palm oil contracts dropped by 1.43%. Prices of soyoil on the Chicago Board of Trade fell by 0.5%.

Palm oil follows the price movement of competing edible oils as it competes to gain a share of the global vegetable oil market.

The palm ringgit's currency of trade has strengthened by 0.22% against the dollar. This makes the commodity a little more expensive for buyers who hold foreign currencies.

Indonesia is looking to have a greater influence on the prices of top commodities at the planned new commodity exchange in its early stages of operation, according to the newly appointed chief regulator of the country. Jakarta aims to become a global price maker.

Technical analyst Wang Tao stated that palm?oil could retest the support level of?4,903 per metric tonne. A break below this may trigger a drop into the range 4,843-4.876 ringgit.

(source: Reuters)