VEGOILS-Weak Dalian drags palm lower, firm crude, soft ringgit cushion fall
Malaysian palm futures fell on Monday as Dalian oil, a rival oil company, was weaker. Crude oil prices were also higher and the ringgit was weaker.
At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for September delivery fell 12 ringgit or 0.29% to 4,106 Ringgit ($959.79).
The contract increased in three successive sessions.
A Kuala Lumpur-based dealer said that higher crude oil prices in the Asian hours had limited the drop on palm prices, despite a weaker Dalian palmolein.
The weaker ringgit has also supported the market, the trader said.
Dalian's palm oil contract, which is the most active contract, fell by 0.87%. Chicago Board of Trade Soyoil gained 0.88%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
The price of oil has risen to its highest level since January, as supply concerns grew following the United States' decision to attack Iran's nuclear sites with Israel on Saturday.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency, the dollar, fell by 0.66%, making the commodity more affordable for buyers who hold foreign currencies.
Technical analyst Wang Tao stated that palm oil could retest the support level of 4,072 Ringgit per metric tonne. A break below this would trigger a fall into the range 3,998-4 042 ringgit.
(source: Reuters)
