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Palm oil declines, tracking weaker rival oils

Palm oil declines, tracking weaker rival oils

KUALA LUMPUR: Malaysian palm oil futures fell on Thursday evening, tracking weaker soyaoil on the Chicago Board of Trade and other related edible oils on China’s Dalian Commodity Exchange.

The benchmark palm oil contract for August delivery

on the Bursa Malaysia Derivatives Exchange was down 0.6 percent at 2,626 ringgit ($607.03) a tonne by the close.

Traded volumes stood at 53,372 lots of 25 tonnes each.

Most commodities, including US soyaoil, were dragged down by a negative US Dow Jones index, said one Kuala Lumpur-based futures trader. The Dow recorded its biggest one-day fall since September on reports that US President Donald Trump tried to interfere with a federal investigation.

However, traders expect rising demand to limit palm’s losses, with higher export shipments ahead of Ramazan seen supporting the market.

“There is congestion at the ports, which is a sign of heavy shipments,” another trader said.

“Production is also not coming in, resulting in slow deliveries of crude palm oil.”

Malaysian shipments of palm oil products rose 7-8.9 percent in the first half of May versus the same period last month, cargo surveyor data showed.

Palm oil’s August contract is expected to test resistance at 2,660 ringgit a tonne, a break above which could lead to a gain to the next resistance at 2,691 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

In related vegetable oils, soyabean oil on the Chicago Board of Trade was down 1.8 percent, while the September soyabean oil contract on the Dalian Commodity Exchange fell 0.4 percent.

The September contract for palm olein was down 0.2 percent.—Reuters

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