SINGAPORE: Malaysian palm oil futures surrendered earlier gains to reverse a two-day climb on Wednesday amid waning strength in soyoil and crude oil, while a stronger ringgit further weighed on investor sentiment.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed down 28 ringgit, or 0.71%, at 3,943 ringgit ($825.76) a metric ton.
Dalian’s most-active soyoil contract and palm oil contract closed afternoon trade higher at 0.92% and 0.86%, respectively. Soyoil prices on the Chicago Board of Trade fell 0.59%. Soybeans, used to derive soyoil, edged down as dealers assessed prospects for US planting weather this week.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Oil prices were stable above $88 a barrel on Wednesday, after industry data showed a surprise drop in US crude stocks last week and a drop in business activity from the world’s largest oil consumer.
Brent crude futures fell 31 cents, or 0.35%, to $88.11 a barrel. US West Texas Intermediate crude futures lost 36 cents, or 0.43%, to $83 a barrel at 0950 GMT. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The Malaysian ringgit, palm’s currency of trade, strengthened 0.06% against the dollar.
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