Palm reverses two-day climb on lower Chicago soyoil, crude prices
13/06/2024 (Reuters), Singapore - Malaysian palm oil futures snapped a two-day winning streak to fallon Thursday, as the contract tracked weaker Chicago soyoil and crude prices, while a stronger ringgit also added to the decline.
The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange closed down 22ringgit, or 0.56%, to 3,941 ringgit ($837.62) a metric ton.
Dalian's most-active soyoil contract DBYcv1 ended daytime trade 0.08% higher, while its palm oil contract DCPcv1 gained 0.49% .
Soyoil prices on the Chicago Board of Trade BOcv1 fell 0.62% as of 1000 GMT assoybeans extended their downward trend.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Improving seasonal palm production, coupled with better demand from India on account of palm being conductively priced versus competing oils has brought about "an equilibrium in markets", said Pranav Bajoria, director at Singapore-based brokerage Comglobal Pte Ltd.
Key palm importer, India's palm oil importsrose by 11.6% in May from the previous month to reach the highest level in four months as its discount over rival oils led to higher purchases, a trade body said in a statement on Thursday.
Malaysian palm oil looks to be trading within a range of 3850 ringgit to 4050 ringgit per ton, with "palm being about $100 discounted to crude soybean on a CNF basis", Bajoria added.
Oil prices slipped on Thursday as investors digested that the U.S. Federal Reserve had likely pushed back an interest rate cut to December and as U.S. crude and fuel stocks rose. O/R
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The Malaysian ringgit MYR=, palm's currency of trade, strengthened 0.21%against the dollar. A stronger ringgit makes palm oil less attractive for foreign currency holders.
Another key palm importer China's agriculture ministrysaid on Thursday that recent high temperatures have had an adverse impact on summer planting and fighting drought and protecting summer planting is arduous.
($1 = 4.7050 ringgit)