15/2/2024 (Reuters), Malaysian palm oil futures dropped on Thursday, weighed down by weakness in rival Chicago soyoil, falling exports and a correction in crude oil prices.

The benchmark palm oil contract FCPOc3 for April delivery on the Bursa Malaysia Derivatives Exchange fell 20 ringgit, or 0.51%, to 3,928 ringgit ($822.45) by midday break, after rising more than 1% on Wednesday.

"Palm oil was under pressure because of weakness in rival oils, especially soyoil. Crude oil is also down," said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.

"Besides, the palm oil's premium over other oils is curtailing demand," he said.

Soyoil prices on the Chicago Board of Trade BOc2 were down 0.62%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Malaysia's palm oil stocks fell more than expected to their lowest in six months at the end of January as production plunged to the lowest level in nine months amid steady exports, the industry regulator said on Tuesday.

Malaysia's palm oil production is falling, but it is unlikely to pave the way for a rally, as exports are also declining at a rapid pace, said a Kuala Lumpur-based dealer.

Exports of Malaysian palm oil products for Feb. 1-15 fell nearly 11% to 561,614 metric tons from 629,918 metric tons shipped during Jan. 1-15, cargo surveyor Intertek Testing Services said on Thursday.

The rebound in palm oil prices is likely to be capped by abundant supplies of rival soyoil and sunflower oil, "soft" oils that are available at discounts to tropical palm oil for the first time in more than a year.

Oil prices eased in early trade on Thursday after data showed that U.S. crude inventories jumped much more than expected, raising concerns about demand in the world's largest economy. O/R

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

Palm oil may retrace towards a range of 3,916 ringgit to 3,925 ringgit per metric ton, as it faces a strong resistance zone of 3,964 ringgit to 3,967 ringgit, Reuters technical analyst Wang Tao said. TECH/C

https://www.nasdaq.com/articles/vegoils-palm-oil-drops-on-weak-soyoil-falling-exports