Palm falls, mirroring rival Chicago soyoil

Malaysian palm oil futures fell on Tuesday, snapping three straight sessions of gains, dragged down by a decline in rival soyoil in the Chicago market.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange lost RM2 ringgit, or 0.05 per cent, to RM4,092 (US$965.1) a metric ton by 0232 GMT.

Soyoil on the Chicago Board of Trade (CBOT) was down 0.87 per cent. Dalian’s most-active soyoil contract was up 0.81 per cent while its palm oil contract rose 1.56 per cent.

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

US soyoil futures hit their highest in 20 months on Monday, supported by US biofuel blending proposals that are likely to increase demand, while soybean futures touched a one-month high before paring gains.

Oil prices climbed over 2 per cent on Tuesday as Iran-Israel tension intensified and US President Donald Trump urged “everyone” to evacuate Tehran, increasing the prospect of deepening unrest in the region and disruption to oil supply.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Cargo surveyor Intertek Testing Services said exports of Malaysian palm oil products for June 1-15 rose 26.3 per cent compared to May 1-15, while according to independent inspection company AmSpec Agri Malaysia the shipments rose 17.8 per cent.

Palm oil may test support of RM4,042 per metric ton, a break below which could open the way toward RM3,998.

US stock futures slipped and oil prices rose on Tuesday, as investors were rattled by US President Donald Trump’s call for everyone to evacuate Tehran with the fifth day of Israel-Iran fighting sowing fears of a broader regional conflict.

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