KUALA LUMPUR: Malaysian palm oil futures closed lower on Monday for a second straight session, giving up its midday gains following losses in rival soyoils, although a weaker ringgit limited losses.
The Bursa Malaysia Derivatives Exchange’s benchmark contract fell 1.2% to 4,758 ringgit ($1,069.21) a metric ton at the close. The contract fell more than 4% last week. Crude palm oil futures had opened lower and recovered earlier at the midday break on bargain buying following the steadiness seen in competing oils, especially soyoil and rapeseed oil, said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin group.
“The weaker Malaysian ringgit and a strong recovery in rapeseed oil futures in Asian hours further helped the bullish sentiments in palm oil,” he said. A Kuala Lumpur-based trader also said the weakness in ringgit was lending support to palm prices.
The ringgit, palm’s currency of trade, weakened 0.07% against the dollar, making the commodity cheaper for buyers holding foreign currencies. The Dalian Commodity Exchange’s most-active soyoil contract fell 0.08%, while its palm oil contract added 0.58%. Soyoil prices on the Chicago Board of Trade fell 1.57%. The rapeseed oil futures contract at the Zhengzhou Commodity Exchange rose 1.55%. Palm oil tracks price movements of rival edible oils, as they compete for a share in the global vegetable oils market.
Malaysia’s palm oil production is set to fall for the fourth consecutive month in December as heavy rainfall hit harvesting in the world’s second-largest producer of the tropical oil, the Malaysian Palm Oil Board said last Friday.
Oil futures eased from their highest levels in weeks as traders took profit while waiting for a Federal Reserve meeting later this week for clues on further rate cuts. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. Cargo surveyors estimated that Malaysian palm oil exports fell between 6.7% and 9.8% during the Dec. 1-15 period.
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