Palm prices weighed down overnight by weakness in Chicago crude and soyoil prices

Malaysian palm futures fell on Thursday due to a drop in crude and soyoil prices overnight in Chicago. However, Dalian oils were stronger, which supported the market.

At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for January delivery fell 19 ringgit or 0.44% to 4,292 Ringgit ($996.52) per metric ton.

A Kuala Lumpur based trader said that the market was down today due to overnight weakness in Chicago soyoil prices and crude oil.

The trader stated, "But we see Dalian oil supporting the market."

Dalian's palm oil contract, which is the most active contract, gained 0.32%. Chicago Board of Trade soyoil prices were up 0.5%.

As they compete to gain a share in the global vegetable oil market, palm oil monitors prices of competing edible oils.

Early Asian trading saw oil prices rise, reversing the sharp declines of the previous two sessions. This was after data from industry showed a sudden drop in U.S. Crude Stockpiles.

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

Palm's trade currency, the ringgit (U.S. Dollar), has fallen by 0.4%, making it cheaper for foreign buyers.

In a joint statement, the ambassadors of the European Union agreed to postpone the implementation of a landmark law on deforestation by one year until the end of December 2020.

Technical analyst Wang Tao stated that palm oil could fall to 4,206 Ringgit per metric tonne after it failed to break through resistance at 4,346 Ringgit.

(source: Reuters)