VEGOILS - Palm falls, Chicago soyoil losses and profit-taking
Malaysian palm futures declined on Thursday as investors booked profit and the Chicago soyoil contracts weakness added to the decline.
At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for December delivery fell 38 ringgit or 0.91% to 4,158 Ringgit ($987.18) per metric ton.
After a jump of more than 4% Wednesday, the contract lost 1.14% overnight.
Malaysian palm futures fell today as traders took profits after yesterday's gains, according to David Ng, a proprietary trading at Kuala Lumpur based trading firm Iceberg X Sdn. Bhd.
The overnight weakness of the Chicago soyoil markets also contributed to the decline.
Chicago Board of Trade soyoil fell by 0.14%. Dalian's markets for vegetable oil were closed during China's Golden Week.
As they compete to gain a share in the global vegetable oil market, palm oil monitors prices of competing edible oils.
Oil prices increased as the possibility of a worsening conflict in the Middle East disrupting crude oil exports from this key region was overshadowed by a more positive outlook for global supply.
Brent crude futures were trading at $74.73 per barrel as of 0450 GMT, up 1.12%. Palm oil is more attractive as a biodiesel feedstock due to the stronger crude oil futures.
The palm ringgit's currency has weakened by 1.06% versus the U.S. Dollar, making it cheaper for foreign buyers.
Following calls from governments and industries around the globe, the European Commission announced that it would delay the implementation of the law prohibiting the importation of goods linked to deforestation for one year.
Technical analyst Wang Tao stated that palm oil could retrace to 4,120 Ringgit per metric tonne before testing resistance at 4,206 Ringgit. ($1 = 4.2120 ringgit)
(source: Reuters)
