Malaysian palm oil futures fell for a second straight session on Wednesday, weighed down by weaker rival edible oils, while market players await palm oil exports data for August 1-20.

The benchmark palm oil contract FCPO1! for November delivery on the Bursa Malaysia Derivatives Exchange lost 25 ringgit, or 0.55%, to 4,496 ringgit ($1,064.14) a metric ton by the midday break.

“Sharp drop in the competing vegetable oils overnight and continuous weakness at current trading hours weighed on and pressured CPO futures prices,” a Kuala Lumpur-based trader said.

Market players were seen trading cautiously while waiting for cargo surveyors to release palm oil exports data for the August 1-20 period, the trader added, while weakness in Malaysian ringgit, the contract currency, provided “mild support”.

Dalian’s most-active soyoil contract (DBYcv1) lost 2.22%, while its palm oil contract CPO1! fell 1.72%. Soyoil on the Chicago Board of Trade (CBOT) (BOc2) was down 0.54%.

Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.

The ringgit USDMYR, palm’s currency of trade, weakened 0.02% against the dollar, making the commodity cheaper for buyers holding foreign currencies.

Palm oil prices are expected to hold above 4,300 ringgit per ton in the near term on a supply slowdown and a cut in soybean availability amid demand for biodiesel, the Malaysian Palm Oil Council (MPOC) said.

Prices of coconut oil are surging in Asia, as supply shortages and booming demand for the nutrient-rich water enclosed within turn the kitchen staple into a premium product, which could drive consumers to shift to alternatives such as palm kernel oil, palm oil, soy and sunflower oil.

Palm oil FCPOc3 may fall further toward 4,388 ringgit per metric ton, near the bottom of a wave (4), said Reuters technical analyst Wang Tao.
Source: Reuters