VEGOILS - Palm oil drops for the second session due to weak competitors, crude oil
Malaysian palm futures declined for the second consecutive session on Monday, dragged down by lower rival edible oils and crude oils. A weak ringgit also provided some support.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for September delivery had fallen 15 ringgit or 0.37% to 4,047 Ringgit ($956.06) per metric ton.
A Kuala Lumpur based trader reported that "Bursa Malaysia crude Palm Oil futures opened slightly lower, reflecting spread adjustments against the competing vegetable oil,"
Dalian's palm oil contract, which is the most active contract, dropped by 0.42%. Chicago Board of Trade soyoil prices fell 1.76%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.
Oil prices fell on Monday, after OPEC+ shocked the markets by increasing output more than expected in august. This raised concerns about an oversupply.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
The palm ringgit's trade currency, the dollar, fell by 0.36%, lowering the price of the commodity for buyers who hold foreign currencies.
A survey shows that Malaysian palm oil inventories dropped in June for the first four-month period as production unexpectedly fell while demand for exports remained strong.
Technical analyst Wang Tao stated that the price of palm oil FCPOc3 could fall between 4,008 and 4,032 ringgit for a metric ton, after completing a five-wave cycling from 3,947.
(source: Reuters)
