Key Takeaways
- Malaysian palm oil futures fell for a second consecutive session.
- The ringgit's strength and lower crude oil prices contributed to the decline.
- Palm oil exports for the first two decades of September showed a significant drop.
Malaysian palm oil futures continued their downward trend on Monday, marking a second consecutive session of losses. The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 41 ringgit, or 0.84%, to 4,857 ringgit ($1,191.90) a metric ton at the close.
The market was pressured by lower oil prices and a stronger ringgit, according to a Kuala Lumpur-based trader. Oil prices had slid to their lowest level in 11 days, as investors hoped for diplomatic progress on the Iran conflict and anticipated a partial recovery in shipments from Saudi Arabia.
Weaker crude oil prices make palm oil less attractive for biodiesel feedstock, impacting its market value. Cargo surveyors estimated that exports of Malaysian palm oil products for the period from September 1 to 20 fell between 12.8% and 24.7% from the previous month.
In related markets, Dalian’s most-active soyoil contract fell 0.11%, while its palm oil contract shed 0.92%. Soyoil prices on the Chicago Board of Trade were down 0.45%. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
The ringgit, the currency of trade for palm oil, strengthened 0.02% against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies. This factor also contributed to the decline in palm oil prices.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 41 ringgit, or 0.84%, to 4,857 ringgit ($1,191.90) a metric ton at the close. The contract fell 0.77% in the previous session, extending the losses for a second straight day.
The market was pressured by lower oil prices and a stronger ringgit, while Friday’s decline in open interest also reflected subdued market participation, a Kuala Lumpur-based trader said. Oil prices slid to their lowest in 11 days as investors hoped for diplomatic progress on the Iran war and eyed a partial recovery in shipments from Saudi Arabia.
Weaker crude makes palm a less-attractive option for biodiesel feedstock. Cargo surveyors estimated that exports of Malaysian palm oil products for September 1 to 20 fell between 12.8% and 24.7% from a month earlier. Dalian’s most-active soyoil contract fell 0.11%, while its palm oil contract shed 0.92%. Soyoil prices on the Chicago Board of Trade were down 0.45%.
