Palm oil inches down on weak Dalian palm oil, strong ringgit

Malaysian palm oil futures hit its lowest in three weeks on Monday, weighed by Dalian palm oil and a stronger ringgit, while market participants awaited fresh triggers to confirm a direction.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange lost 23 ringgit, or 0.52%, to 4,399 ringgit ($1,041.43) a metric ton by the midday break, falling for the second consecutive day.

“Today, crude palm oil future is still tracking Dalian performance, while waiting for new leads on the market such as weather condition and (possible) improvement in US-China trade talks this week,” a Kuala Lumpur-based trader said.

Dalian’s most-active soyoil contract was up 0.73%, while its palm oil contract lost 0.31%.

Soyoil prices on the Chicago Board of Trade rose 0.97%. Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Exports of Malaysian palm oil products for October 1-25 fell 0.4% to 1,283,814 metric tons from 1,288,462 metric tons shipped during September 1-25, cargo surveyor Intertek Testing Services said.

Oil prices rose after US and China officials sketched out a trade-deal framework, easing fears that tariffs and export curbs between the world’s top two oil consumers could dent global economic growth. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, strengthened 0.17% against the dollar.

A stronger ringgit makes palm oil more expensive for buyers holding foreign currencies.

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