Palm prices rangebound due to weaker soyoil and concerns about rising production, stock levels

Malaysian palm futures were in a narrow range on Monday. They were affected by lower soyoil and rising production levels and inventories, but also supported by higher crude oil prices.

The benchmark contract for palm oil delivery in August on the Bursa Derivatives exchange rose by 2 ringgit or 0.05% to 3,829 Ringgit ($908.42) per metric ton.

David Ng is a proprietary trader with Kuala Lumpur's trading firm Iceberg X Sdn. Bhd. He said that the decline in prices was due to rising production and stock levels.

Dalian's palm oil contract dropped 0.97%, while the most active soyoil contract in Dalian fell by 1.08%. Chicago Board of Trade is closed on a holiday.

As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.

The palm ringgit's trade currency strengthened by 0.31% versus the dollar. This made the commodity more costly for buyers who hold foreign currencies.

Oil prices increased after U.S. president Donald Trump extended the deadline for trade negotiations with the European Union. This eased concerns over U.S. tariffs against the EU that could affect fuel demand.

Palm oil is a better option as a biodiesel source because crude oil futures are stronger. ($1 = 4.2150 ringgit)

(source: Reuters)