KUALA LUMPUR: Malaysian palm oil futures closed lower on Thursday on profit-taking and weakness in rival Chicago soyoil, as prices consolidated after a recent uptick.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed 40 ringgit, or 0.99%, lower at 3,994 ringgit ($849.43) per metric ton.
Malaysia palm oil futures were seen lower on profit-taking following weakness in Chicago Board of Trade soyoil futures and an adjustment of prices after a strong rise recently, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
“The weakness in crude oil and ultra-low sulfur diesel prices is also a concern for palm oil as it has weakened the biofuel margins,” Bagani said.
Dalian’s most-active soyoil contract fell 1.04%, while its palm oil contract lost 1.07%. Soyoil prices on the Chicago Board of Trade were down 1.5%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysian palm oil extends gains on better demand from key buyers
Oil prices eased on Thursday after resilient U.S. economic activity pointed to borrowing costs staying higher for longer in a potential blow to demand.
At 0630 GMT, Brent futures dipped 26 cents or 0.3% to $83.34 a barrel.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, was unchanged against the dollar.
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