JAKARTA: Malaysian palm oil futures closed down 3.02% on Monday, following a stronger ringgit and weaker rival oils, although the contract booked a monthly gain.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange shed 3.02% to 3,885 ringgit ($861.99) per tonne at the closing price, its weakest level in more than a month. The contract logged a 2.53% monthly gain.
“After last week’s rally on Russian-Ukraine news, the market seems to be taking a breather, alongside the strengthened ringgit,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract was down 2.12%, while its palm oil contract dropped 2.38%. Soyoil prices on the Chicago Board of Trade lost 2.51%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysia’s palm oil exports for July rose 7.8% from the month before, according to AmSpec Agri Malaysia, while cargo surveyor Intertek Testing Services (ITS) showed a 14% rise in exports for July.
Oil prices hovered near three-month highs on Monday, set to post their biggest monthly gain in more than a year on expectations that Saudi Arabia would extend voluntary output cuts into September and tighten global supply.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil may bounce to 4,057 ringgit per metric ton, before resuming its downward trend to retest a support at 3,964 ringgit.
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