Palm oil tracks down weaker related oils on Dalian, Chicago

Malaysian palm oil futures dropped on Thursday, weighed by weakness in vegetable oils in the Chicago and Dalian commodity exchange after four consecutive session of gains.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange lost RM25 or 0.64 per cent to RM3,898 (US$908.41) a metric ton in early trade.

Dalian’s most-active soyoil contract was down 0.48 per cent, while its palm oil contract for June delivery lost 0.32 per cent. Soyoil prices on the Chicago Board of Trade (CBOT) plunged 4.44 per cent.

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

Indonesia will raise its crude palm oil (CPO) export levy starting May 17 to 10 per cent of its CPO reference price from 7.5 per cent currently, in order to finance the country’s increased biodiesel blending mandate.

India’s vegetable oil imports in April plunged to their lowest in over four years, led by declines in palm oil imports, dragging inventories to their lowest in nearly five years, a leading industry body said.

Argentina’s Rosario grains exchange on Wednesday raised its estimate for the country’s 2024/25 soybean production to 48.5 million metric tons from previously 45.5 million tons.

Oil prices lost nearly US$1 in early trade on Thursday on expectations of a potential US-Iran nuclear deal, while an unexpected build in US crude oil inventories last week heightened investor concerns about oversupply.

Palm oil FCPOc3 may retest support at RM3,921 per metric ton, a break below which could trigger a fall into the RM3,871 to RM3,887 range.

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