Palm oil falls on profit-taking, weaker Chicago soyoil

Malaysian palm oil futures closed lower on Thursday on profit-taking and weakness in rival Chicago soyoil, as prices consolidated after a recent uptick.

The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange closed 40ringgit, or 0.99%, lower at 3,994 ringgit ($849.43)per metric ton.

Malaysia palm oil futures were seen lower on profit-taking following weakness in Chicago Board of Trade soyoil futures and an adjustment of prices after a strong rise recently, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

“The weakness in crude oil and ultra-low sulfur diesel prices is also a concern for palm oil as it has weakened the biofuel margins,” Bagani said.

Dalian’s most-active soyoil contract DBYcv1 fell 1.04%,while its palm oil contract DCPcv1 lost 1.07%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 1.5%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Oil prices eased on Thursday after resilient U.S. economic activity pointed to borrowing costs staying higher for longer in a potential blow to demand. O/R

At 0630GMT, Brent LCOc1 futures dipped 26 cents or 0.3% to $83.34 a barrel.

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

The ringgit MYR=, palm’s currency of trade, was unchanged against the dollar.

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