JAKARTA: Malaysian palm oil futures fell for a second straight session on Wednesday after hitting its highest level in more than five months, weighed down by weaker rival edible oils, but stronger crude oil and a weaker currency capped losses.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange lost RM42, or 0.93 per cent, to RM4,479 (US$1,059.12) a metric ton at 0232 GMT.
Dalian’s palm oil contract fell 1.9 per cent, while its most-active soyoil contract lost 1.96 per cent. Soyoil on the Chicago Board of Trade (CBOT) was down 0.43 per cent.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices rose on Wednesday as supply concerns are resurfacing while peace talks ending Russia’s invasion of Ukraine are likely to take longer, leaving in place sanctions on Russian crude and raising the chance of further restrictions on its buyers.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.17 per cent against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Palm oil prices are expected to hold above RM4,300 per ton in the near term on a supply slowdown and a cut in soybean availability amid demand for biodiesel, the Malaysian Palm Oil Council (MPOC) said.
Cargo surveyors are due to publish estimates on Malaysian palm oil exports for the Aug 1-20 period later in the day.
Shares in Asia fell on Wednesday, weighed down by a tech-led selloff on Wall Street, while the dollar gained some ground ahead of a key meeting of central bankers later in the week.
© New Straits Times Press (M) Bhd
