JAKARTA: Malaysian palm oil futures extended losses in heavy morning trade on Thursday, tracking weakness in rival soyoil at the Chicago Board of Trade exchange.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange lost 7 ringgit, or 0.14%, to 4,849 ringgit ($1,093.84) a metric ton by the midday break.
“Futures prices fall with heavy morning selling activities. Overnight weakness in soyoil at the Chicago exchange also dragged the futures lower,” said a Kuala Lumpur-based trader.
Soyoil lost 0.99% at the Chicago Board of Trade. Dalian’s most-active soyoil contract rose 0.3%, while its palm oil contract fell 0.78%.
Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Malaysia’s palm oil stockpiles dropped for a second consecutive month in November, falling 2.6% from the prior month to 1.84 million tons, data from the Malaysian Palm Oil Board (MPOB) showed on Tuesday.
Palm ends lower on profit-booking and tracking Dalian palm
Crude palm oil production declined 9.8% to its lowest level for the month in four years to 1.62 million tons, while palm oil exports plunged 14.7% to 1.49 million tons.
Cargo surveyor Intertek Testing Services said on Tuesday that exports of Malaysian palm oil products for Dec. 1-10 rose 3.9%, while according to independent inspection company AmSpec Agri Malaysia it rose 1.1%
Oil prices were little changed in early Asian trade on Thursday as forecasts of weak demand and a higher-than-expected rise in U.S. gasoline and distillate inventories stemmed gains from an additional round of European Union sanctions that threatened Russian oil flows.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil is expected to bounce to 4,961 ringgit per metric ton as it stabilized around support at 4,825 ringgit, Reuters technical analyst Wang Tao said.
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