Palm slips more than 3% on weaker Dalian contracts and crude oil
04/06/2024 (Reuters), Kuala Lumpur - Malaysian palm oil futures fell more than 3% on Tuesday as trading resumed after a public holiday, with weakness in rival Dalian contracts and crude oil prices weighing on the market.
The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange closed 156 ringgit, or 3.83%, lower at 3,920 ringgit ($834.04) per metric ton, its steepest daily decline since May 31, 2023.
Weakness in Dalian soyoil futures and crude oil prices are putting pressure on Malaysian palm oil futures, said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.
Dalian's most-active soyoil contract DBYcv1 fell 1.58%,while its palm oil contract DCPcv1 lost 1.75%.Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.29%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices fell more than $1 on Tuesday, extending losses from a four-month low in the previous session, as investors worried about supply rising later in the year amid signs of weakening U.S. demand.O/R
At 1000GMT, Brent crude futures LCOc1 were down $1.33, or 1.70%,to $77.03 a barrel.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit MYR=, palm's currency of trade, strengthened 0.09%against the dollar, making the commodity slightlymore expensive for buyers holding the foreign currency.
($1 = 4.7000 ringgit)