JAKARTA: Malaysian palm oil futures fell for a second straight session on Monday dragged by weaker rival edible oils and crude oil, while a weak ringgit lent some support.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange lost 15 ringgit, or 0.37%, to 4,047 ringgit ($956.06) a metric ton by the midday break.
“Bursa Malaysia crude palm oil futures opened marginally lower, mirroring spread adjustment against the competing vegetable oils,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract dropped 1.05%, while its palm oil contract shed 0.42%. Soyoil prices on the Chicago Board of Trade plunged 1.76%.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices slipped on Monday after OPEC+ surprised markets by hiking output more than expected in August, raising concerns about oversupply.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.36% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Malaysia’s palm oil inventories likely dropped for the first time in four months in June as production fell unexpectedly while export demand remained robust for the tropical oil, a Reuters survey showed.
Palm oil FCPOc3 may fall into the 4,008 ringgit to 4,032 ringgit per metric ton range, as a five-wave cycle from 3,947 ringgit has completed, Reuters technical analyst Wang Tao said.
