JAKARTA: Malaysian palm oil futures closed down on Monday, tracking a decline in rival vegetable oils on the Dalian and Chicago exchanges, while traders await data from the Malaysian Palm Oil Board (MPOB) for further cues.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed down 10 ringgit, or 0.2%, at 5,118 ringgit ($1,157.39) a metric ton. “Market is expected to trade rangebound on Monday in anticipation of the official MPOB data, due tomorrow, for further direction,” said Darren Lim, commodities strategist at brokerage Phillip Nova.
Malaysia’s palm oil inventories are likely to have dropped in November for a second consecutive month as torrential rains disrupted production, a Reuters survey showed.
A flood struck Malaysia last week after heavy rains in November. The country’s meteorological department forecast a monsoon surge from Dec. 8 to 14, which could bring continuous rainfall to the east coast of Peninsular Malaysia and parts of Sabah and Sarawak on Borneo Island. On the day, Dalian’s most-active soyoil contract dropped 0.71%, while its palm oil contract slipped 0.23%. Soyoil fell 0.28% on the Chicago Board of Trade.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market. Oil prices climbed by more than 1% on Monday as top importer China flagged its first move toward a loosened monetary policy since 2010 aiming to bolster economic growth, state media reported citing a Politburo meeting.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
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