VEGOILS - Palm oil ends lower due to weaker competitor oils. Traders await positive signals

Malaysian palm futures declined on Tuesday as traders looked for bullish signals to support prices.

The benchmark May palm oil contract on Bursa Malaysia's Derivatives exchange fell 34 ringgit (0.75%) to close at 1,014.63 ringgit per metric ton.

A Kuala Lumpur based trader stated that the market was under pressure due to the weakness of rival oilseeds, as there were no significant bullish reports.

Dalian's palm oil contract, which is the most active contract, fell by 0.33% while soyoil prices dropped by 0.25%. Chicago Board of Trade soyoil prices were down 0.5%.

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

The palm ringgit's trade currency, the dollar, fell by 0.25%, making the commodity more affordable for buyers who hold foreign currencies.

The chief executive of Indonesia's state plantation fund announced that the country has set an ambitious target of replanting 120,000 hectares this year of palm oil plantations owned by smallholders.

AgRural, an agribusiness consulting firm, said that Brazil's soybean harvest reached 23% of its planted area as of last week. This is up 8 percentage points compared to the previous week.

Brent crude oil prices rose on Tuesday. They added to the gains made in the previous session after a drone strike on an oil pipeline pumping stations in Russia reduced the flow of oil from Kazakhstan. However, gains were limited by the prospect that supply would soon increase.

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

(source: Reuters)