Palm flat as strong Dalian oils counter weak crude, Chicago soyoil

Malaysian palm oil futures traded in a tight range early on Thursday as support from rival Dalian oils offset the weakness in crude oil and Chicago soyoil.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained RM2, or 0.05 per cent, to RM4,064 (US$963.03) a metric tonne.

The contract rose 2.37 per cent on Wednesday.

Dalian’s most-active soyoil contract rose 0.35 per cent, while its palm oil contract added 1.07 per cent. Soyoil prices on the Chicago Board of Trade (CBOT) fell 0.67 per cent.

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

Oil prices eased, reversing Wednesday’s gains, on concerns over weak US demand after government data showed a surprise stock buildup in the world’s biggest crude consumer.

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

The ringgit, palm’s currency of trade, strengthened 0.14 per cent against the US dollar, making the commodity slightly more expensive for buyers holding foreign currencies.

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