Palm drops for a second session on weak rivals, crude oil

Malaysian palm oil futures fell for a second straight session on Monday dragged by weaker rival edible oils and crude oil, while a weak ringgit lent some support.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange lost 15 ringgit, or 0.37%, to 4,047 ringgit ($956.06) a metric ton by the midday break.

“Bursa Malaysia crude palm oil futures opened marginally lower, mirroring spread adjustment against the competing vegetable oils,” a Kuala Lumpur-based trader said.

Dalian’s most-active soyoil contract dropped 1.05%, while its palm oil contract shed 0.42%. Soyoil prices on the Chicago Board of Trade plunged 1.76%.

Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Oil prices slipped on Monday after OPEC+ surprised markets by hiking output more than expected in August, raising concerns about oversupply.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, weakened 0.36% against the dollar, making the commodity cheaper for buyers holding foreign currencies.

Tags: futures, benchmark contract, soyoil, Malaysia, palm oil