KUALA LUMPUR: Malaysian palm oil futures fell for a second straight session on Thursday, weighed down by higher inventories in the world’s top two producers and tracking weakness in rival edible oils.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange had fallen 86 ringgit, or 2.23%, to 3,770 ringgit ($832.14) a tonne by the midday break. Palm has risen nearly 5% so far in the week after two straight weeks of declines. Malaysia’s financial markets will be closed on Friday for a national holiday.
The contract has been under pressure due to higher stocks in both Indonesia and Malaysia, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Palm oil needs to maintain its wider discount over competing soy oil and sun oil to attract buying and, therefore, any price recovery has been met with renewed selling pressure, he added.
Dalian’s most-active soyoil contract fell 1.3%, while its palm oil contract eased 0.9%. Soyoil prices on the Chicago Board of Trade extended a 2.2% overnight loss.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil slips on profit booking after three-day rally
Palm oil may keep hovering below a strong resistance at 3,916 ringgit per tonne, or retrace towards 3,686 ringgit, as suggested by its wave pattern and a retracement analysis, Reuters technical analyst Wang Tao said.
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