Palm tracks Dalian palm olein and Chicago soyoil lower

Malaysian palm oil futures opened lower on Friday, erasing all the gains made so far this week, as weakness in Dalian palm olein and Chicago soyoil outweighed support from stronger crude oil prices.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange slid RM65, or 1.5 per cent, to RM4,265 (US$1,011.14) a metric tonne in early trade. The contract has declined 0.09 per cent so far this week after three straight weeks of gains.

Dalian’s most-active soyoil contract rose zero point four nine per cent, while its palm oil contract shed zero point six nine per cent. Soyoil prices on the Chicago Board of Trade were down zero point three five per cent.

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

Oil prices rose, buoyed by optimism over a potential trade deal between the US and the European Union and reports of Russian plans to restrict gasoline exports to most countries.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, weakened zero point one four per cent against the US dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

Indonesia’s palm oil exports are likely to fall to 28 million metric tonnes in 2025 from 29.5 million tonnes shipped a year earlier, the Indonesian Palm Oil Association said.

Malaysia’s crude palm oil production is likely to rise to 19.5 million tonnes in 2025 from last year’s 19.3 million tonnes, as labour supply has improved, the Malaysian Palm Oil Board said.

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