Palm oil price fell on Tuesday

Palm oil prices fell, following weakness in the crude and soybean oil markets, said David Ng, a trader at Iceberg X in Kuala Lumpur. Ng sees support for palm oil at 4,600 ringgit per tonne and resistance at 4,750 ringgit per tonne. However, as research firm Kenanga Futures noted in its research, the decline could be limited by bargain-buying after the recent decline. The September derivatives contract on Bursa Malaysia fell 16 ringgit to 4,656 ringgit per tonne.

Malaysian palm oil futures fell on Tuesday after reaching a 1.5-month high in the previous session, fueled by weakness in rival vegetable oils and profit-taking by traders.

The benchmark FCPO3 palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange fell 16 ringgit, or 0.34%, to 4,656 ringgit (US$1,125.18) per metric tonne at the close of trading, following two consecutive gains.

“We are seeing profit-taking today following the recent price rise. High prices are essentially a drag on palm oil prices as buyers are limiting their purchases,” said Paramalingan Supramaniam, director of Pelindung Bestari in Selangor.

In competing markets, soybean oil prices on the Chicago Mercantile Exchange were unchanged. The most active soybean oil contract on the Dalian Commodity Exchange fell 0.27%, while the palm oil contract declined 0.71%.

Palm oil prices are tracking the price movements of competing edible oils as it competes for market share in the global vegetable oil market.

According to cargo inspection company Intertek Testing Services, Malaysian palm oil exports from June 1 to 20 increased by 19.1% compared to the previous month, supporting the market. Independent inspection company AmSpec Agri Malaysia reported that shipments increased by 25% month-on-month during the same period.

The ringgit strengthened 0.19% against the dollar, making the commodity more expensive for buyers holding foreign currency.

Reuters technical analyst Wang Tao predicts that the price of FCPO3 palm oil is likely to break the 4,697 ringgit per metric ton resistance level in the third quarter and rise to a range of 4,933-5,226 ringgit.

Tags: prices, palm oil