Palm opens lower on weak rival oils, crude

Malaysian palm oil futures slipped for the second straight session on Tuesday, tracking weaknesses in rival oils in the Dalian and Chicago markets and softer crude oil prices.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange lost RM25, or 0.63 per cent, to RM3,960 (US$946.24) a metric ton in early trade.

Dalian’s most-active soyoil contract fell 0.18 per cent, while its palm oil contract dropped 0.12 per cent. Soyoil prices on the Chicago Board of Trade (CBOT) slipped 0.36 per cent.

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

Crude prices declined, weighed by expectations of an OPEC+ output hike in August and concerns of an economic slowdown driven by prospects of higher US tariffs.

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

Indonesia raised its crude palm oil (CPO) reference price to US$877.89 per metric ton for July, up from US$856.38 per metric ton in June, a trade ministry regulation showed on Monday.

Exports of Malaysian palm oil products for June rose 4.3 per cent month-on-month, according to independent inspection company AmSpec Agri Malaysia, while according to Intertek Testing Services, it grew 4.7 per cent.

Soybean oil used to produce biofuels in the US fell to 829 million pounds in April from 832 million pounds in March.

The ringgit, palm’s currency of trade, strengthened 0.59 per cent against the dollar, making the commodity more expensive for buyers holding foreign currencies.

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