Palm slips on weaker rivals; firmer crude oil caps losses
Malaysian palm oil futures declined on July 18, influenced by weaker performances in Dalian and Chicago contracts. The benchmark October contract on Bursa Malaysia fell 15 ringgit to 3,917 ringgit per metric ton. Despite this, support came from firmer crude oil prices and a slight depreciation of the Malaysian ringgit against the dollar, making palm oil cheaper for foreign buyers. Market analysts predicted a trading range for palm oil and noted its sensitivity to global vegetable oil market dynamics amid ongoing trade tensions impacting Asian equities.
KUALA LUMPUR, July 18 (Reuters) -Malaysian palm oil futures fell on Thursday, weighed down by weakness in rival Dalian and Chicago contracts, although firmer crude oil prices and a weaker ringgit capped losses.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange was down 15 ringgit, or 0.38%, to 3,917 ringgit ($839.84) a metric ton by 0239 GMT.
FUNDAMENTALS
* Dalian’s most-active soyoil contract DBYcv1 fell 0.58%, while its palm oil contract DCPcv1 lost 0.41%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.05%.
* Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
* Oil prices ticked higher, buoyed by a bigger-than-expected weekly decline in U.S. crude stocks.
* Brent LCOc1 futures rose 18 cents, or 0.21%, to $85.26 a barrel by 0231 GMT.
* Firmer crude oil futures make palm a more attractive option for biodiesel feedstock.
* The ringgit MYR=, palm’s currency of trade, weakened 0.09% against the dollar, making the commodity less expensive for buyers holding foreign currencies.
* Malaysia maintained its August export tax for crude palm oil at 8.0% and raised its reference price, a circular on the Malaysian Palm Oil Board website showed.
* Palm oil may fall into a range of 3,841-3,873 ringgit per metric ton, as a bounce from the July 10 low of 3,850 ringgit may have ended, Reuters technical analyst Wang Tao said.
MARKET NEWS
* Asian equities fell, led by chip stocks as investors fret over the prospect of escalating trade tensions between the U.S. and China, while the yen surged to a six-week high in the wake of suspected interventions by Tokyo last week.
Source Link : https://www.xm.com/research/markets/allNews/reuters/palm-slips-on-weaker-rivals-firmer-crude-oil-caps-losses-53882895
