Palm oil extends decline on weaker rivals, higher production
25/04/2024 (XM), Singapore - Malaysian palm oil futures extended losses to a second consecutive sessionon Thursday, weighed down by weakerrival edible oils and higher production in key palm producing countries.
The benchmark palm oil contract FCPOc3 for July delivery on the Bursa Malaysia Derivatives Exchange was down 92 ringgit, or 2.33%, at 3,850 ringgit ($805.27) a metric ton by themidday break, recovering slightly from an intraday low of 3,817 ringgit.
Rising production and losses in related vegetable oils futures on the Chinese exchanges are dragging downMalaysian palm, said Sathia Varqa, a senior analyst at FastmarketsPalm Oil Analytics.
Dalian's most-active soyoil contract DBYcv1 fell 1.2%, while its palm oil contract DCPcv1 lost 2.45%. Soyoil prices on the Chicago Board of Trade BOcv1 shed0.42%.
Weakness in soft oils, especially soyoil, has forced palm oil prices to ease, said Anilkumar Bagani, research head at Mumbai-based vegetable oil broker Sunvin Group.
Soybean prices weakened amid ongoing planting in the U.S. Midwest, pushing soyoil prices lower.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysia's meteorological agency reduced issuances of Level1 hot weather alerts to less than 20 areas onWednesday evening. Hot weather negatively affects palm yields.
Meanwhile,members of Malaysia's Programme Advisory Committee discussed initiatives and methods to improvecrop materials and efficient farm management to boostyields, Malaysia-based Bernama reported on Wednesday.
The Malaysian ringgit MYR=, palm's currency of trade, weakened 0.13% against the dollar.
Palm oil may retest resistance at 4,012 ringgit per ton, as a bounce from Monday's low of 3,880 ringgit looks incomplete, said Reuters technical analyst Wang Tao.
Source: Reuters