JAKARTA: Malaysian palm oil futures fell on Monday, weighed down by profit taking and a fall in the Dalian palm oil contract.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was down 38 ringgit, or 0.96%, to 3,939 ringgit ($909.49) a metric ton by the midday break.
“The benchmark is having a correction from profit taking after recent rally, and tracking Dalian palm oil fall,” a Kuala Lumpur-based trader said. Dalian’s most-active soyoil contract fell 0.54%, while its palm oil contract dropped 1.27%.
The Chicago Board of Trade is closed for a holiday. Palm oil tracks price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysian palm oil futures log first monthly rise in three months
Malaysia’s August palm oil exports are seen at 1,376,412 metric tons, according to Amspec Agri.
Exports of Malaysian palm oil products for August fell 9.9% to 1,445,442 metric tons from 1,604,578 metric tons shipped in July, cargo surveyor Intertek Testing Services said on Saturday.
Indonesia raised its crude palm oil (CPO) reference price for September to $839.53 per metric ton from $820.11 in August, a trade ministry regulation showed on Friday. Traders are also moving cautiously as key importer India is mulling an import tax increase on vegetable oils, which could hit demand for palm oil.
The Malaysian ringgit, palm’s currency of trade, weakened 0.28% against the dollar.
A weaker ringgit makes palm oil more attractive for foreign currency holders.
Oil prices extended losses on Monday on expectations for higher OPEC+ production starting in October and as signs of sluggish demand in China and the US, the world’s two largest oil consumers, raised concerns about future consumption growth.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil may test resistance at 4,023 ringgit per metric ton, a break above could open the way towards 4,122 ringgit, according to Reuters’ technical analyst Wang Tao.
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