Palm drops more than 2pct on rising stock concerns, weak soyoil
09/07/2024 (New Straits Times), Mumbai - Malaysian palm oil futures fell more than 2 per cent on Tuesday, marking their biggest drop in a month, due to an expected rise in stockpiles and tracking losses in rival soyoil, following better-than-expected crop conditions for the U.S. soybean crop.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange fell 86 ringgit, or 2.13 per cent, to RM3,956 (US$839.92) a metric tonne by the midday break. The contract gained 3.2 per cent last week.
"With the palm oil market closed on Monday, it is now catching up with soyoil's drop over the past two days," said a Mumbai-based dealer with a global trade house.
U.S. soyoil futures were down 1.5 per cent after losing 0.9 per cent on Monday.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil stocks have risen in Malaysia, and to bring them down, exports need to pick up, which will happen only if prices correct, the dealer said.
Palm oil inventories in Malaysia, the world's second-biggest producer, rose for a third consecutive month in June as exports slowed, while output fell from the previous month, a Reuters survey showed.
Malaysia's palm oil stocks were seen at 1.83 million metric tons, up 4.53 per cent from May-end, according to the median estimate of 12 traders, planters and analysts polled by Reuters.
The Malaysian Palm Oil Board data is scheduled to be released on July 10.
Palm oil may break support at 4,027 ringgit per metric ton and fall into 3,951-3,989 ringgit range, according to Reuters' technical analyst Wang Tao.
Soybeans slipped 0.1 per cent to US$10.98-3/4 a bushel having dropped 2.7 per cent the day before. Soybeans fell to their lowest since 2020 on Monday.
The U.S. Department of Agriculture (USDA) on Monday increased the percentage of corn, soy and wheat crops in good-to-excellent condition on Monday. Its ratings were better than analysts expected. (US$1 = RM4.7100)