Palm falls for a second session on weak Chicago soyoil, crude oil

Malaysian palm oil futures extended losses for a second consecutive session on Tuesday, weighed down by weaker Chicago soyoil and crude oil prices but stronger Dalian soyoil capped the decline.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange slid RM17, or 0.38 per cent, to RM4,475 (US$1,064.21) a metric ton in early trade.

Dalian’s most-active soyoil contract rose 0.05 per cent, while its palm oil contract shed 1.02 per cent. Soyoil prices on the Chicago Board of Trade were down 0.27 per cent.

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

Oil prices edged down after surging nearly 2 per cent in the previous session, as traders kept a close watch on developments in the Russia-Ukraine conflict for the potential impact on fuel supplies from the region.

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

Cargo surveyors estimated that exports of Malaysian palm oil products for August 1-25 rose between 10.9 per cent and 16.4 per cent from a month earlier.

The ringgit, palm’s currency of trade, weakened 0.12 per cent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

Indonesia urged the European Union to scrap countervailing duties on imports of biodiesel immediately, after the World Trade Organisation backed several of Jakarta’s main claims in a complaint to the trade body.

The dollar and US Treasuries slid in Asian trading on Tuesday after President Donald Trump announced he was removing a Federal Reserve governor, which undermined confidence in US assets.

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