Palm oil falls on Chicago soyoil
Malaysian palm futures fell on Monday. They mirrored losses in the Chicago market for soyoil, but the weaker ringgit tempered the decline.
During the midday break, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange fell 14 ringgit or 0.33% to 4,286 Ringgit ($1,003.28) per metric ton.
The contract has seen three weeks of gains in a row.
A Kuala Lumpur-based broker said that the Malaysian palm futures market has taken a break after a strong rally on Friday.
The trader stated that "a mild decline in Chicago soyoil price brought down the Malaysian Palm Oil Futures this morning."
Chicago Board of Trade soyoil was down by 1.43%. Dalian's markets for vegetable oil were closed during China's Golden Week.
Chicago corn and soybean contracts lost further ground as the stronger dollar and expectations for record U.S. supply continued to be a headwind to prices.
As rival edible oils compete to gain a share of global vegetable oil market, palm oil monitors the price movement of their competitors.
The oil prices fell in early trading after Friday's biggest weekly gain in more than a year, amid growing threats of war across the Middle East.
Brent crude futures were down 0.44% to $77.71 per barrel as of 0434 GMT. Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
The palm ringgit's trade currency, the dollar, fell by 1.35%, making the commodity more affordable for buyers who hold foreign currencies.
Technical analyst Wang Tao stated that palm oil could extend gains up to 4,432 Ringgit per metric tonne, after it broke key resistance at 4,293 Ringgit.
(source: Reuters)
