Malaysian palm oil futures closed lower for a third straight session on Monday on bearish sentiment over rising production, and tracking overnight losses in US soyoil and crude oil prices. The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 1.5 percent to 2,125 ringgit ($508.01) a tonne, in its sharpest decline in three weeks. Earlier in the session, it hit its weakest level since Dec. 18 at 2,124 ringgit.
Trading volumes stood at 21,922 lots of 25 tonnes each at the end of the trading day. The market declined sharply in the evening after data from the Malaysian Palm Oil Association showed production for Dec. 1-20 gained 5.6 percent from a month earlier, said a Kuala Lumpur-based futures trader.
"Friday's fall in rival oilseed and the energy front also stoked a lower opening (for palm)," said the futures trader, referring to soyoil on the Chicago Board of Trade and crude oil prices.
Oil prices on Friday had fallen to their lowest in over a year on the back of a global oversupply, despite planned production cuts by the Organization of the Petroleum Exporting Countries.
Palm prices are impacted by movements in crude oil, as the vegetable oil is used as feedstock to make biodiesel.
In other related oils, the Chicago January soybean oil contract dropped over 1 percent on Friday as favourable weather boosted soybean crop prospects in South America, overshadowing support from renewed Chinese buying of US supplies. It was last down 0.5 percent on Monday.
Palm oil prices have been impacted by changes in soyoil prices in recent sessions, as they compete for a share in the global vegetable oil market. Meanwhile, the January soybean oil contract on the Dalian Commodity Exchange fell 0.9 percent and the Dalian January palm oil contract declined 1.1 percent.
Comments
Comments are closed.