Palm oil falls on profit-taking, weaker Chicago soyoil
On Thursday, Malaysian palm oil futures closed lower as profit-taking ensued amidst a backdrop of Chicago soyoil weakness, with the benchmark August contract on the Bursa Malaysia Derivatives Exchange settling at 3,994 ringgit per metric ton, down 40 ringgit or 0.99%. This downturn followed a recent uptick, compounded by concerns over weakened biofuel margins due to lower crude oil and ultra-low sulfur diesel prices. Dalian and Chicago soyoil futures also saw declines, influencing palm oil’s position in the global vegetable oils market. Additionally, with U.S. economic activity signaling sustained higher borrowing costs, oil prices softened, with Brent futures slipping to $83.34 a barrel at 0630GMT. This diminished attractiveness of palm oil as a biodiesel feedstock, coupled with stable ringgit-dollar exchange rates, contributed to the day’s market dynamics.
KUALA LUMPUR, May 30 (Reuters) -Malaysian palm oil futures closed lower onThursday on profit-taking and weakness in rival Chicago soyoil, as prices consolidated after a recent uptick.
The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange closed 40ringgit, or 0.99%, lower at 3,994 ringgit ($849.43)per metric ton.
Malaysia palm oil futures were seen lower on profit-taking following weakness in Chicago Board of Trade soyoil futures and an adjustment of prices after a strong rise recently, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
“The weakness in crude oil and ultra-low sulfur diesel prices is also a concern for palm oil as it has weakened the biofuel margins,” Bagani said.
Dalian’s most-active soyoil contract DBYcv1 fell 1.04%,while its palm oil contract DCPcv1 lost 1.07%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 1.5%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices eased on Thursday after resilient U.S. economic activity pointed to borrowing costs staying higher for longer in a potential blow to demand. O/R
At 0630GMT, Brent LCOc1 futures dipped 26 cents or 0.3% to $83.34 a barrel.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit MYR=, palm’s currency of trade, was unchanged againstthe dollar.
Source Link : https://www.xm.com/research/markets/allNews/reuters/palm-oil-falls-on-profittaking-weaker-chicago-soyoil-53849968
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