Palm prices fall on weaker demand for exports and Chicago soyoil.

Malaysian palm futures fell on Wednesday due to a weaker Chicago soyoil price and sluggish demand for exports. Investors are awaiting cargo surveyor data in order to determine the direction of prices.

By midday, the benchmark palm oil contract on Bursa Derivatives Malaysia Exchange for February delivery had fallen 33 ringgit or 0.67% to 4,891 Ringgit ($1,094.92) per metric ton. The contract gained 0.51% during the last session.

David Ng said that the market fell on a weaker export demand, and a decline in Chicago soybean oil, according to a proprietary trader with Kuala Lumpur's trading firm Iceberg X Sdn. Bhd.

Later in the day, cargo surveyors will release their estimates of Malaysian palm oil imports for the period Nov. 1-20.

Dalian's palm oil contract grew by 0.59%, while the most active soyoil contract increased by 0.2%. Chicago Board of Trade soyoil prices were down by 0.25%.

As rival edible oils compete to gain a share of global vegetable oil market, palm oil monitors the price movement of their competitors.

The price of oil edged up amid an escalation of the Ukraine conflict and signs that Chinese crude imports are increasing, but rising U.S. crude inventories tempered overall gains.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The palm ringgit's trade currency strengthened by 0.09% to the dollar. This made the commodity more costly for buyers who hold foreign currencies.

A circular posted on the Malaysian Palm Oil Board's website revealed that Malaysia increased its December export tax to 10%, and its reference price was raised to 4,471.39 Ringgit per ton.

Technical analyst Wang Tao stated that palm oil could test support at 4,869 Ringgit per ton. A break below this level would open the door to a range of 4,732 to 4,816 Ringgit.

(source: Reuters)