Malaysian palm oil futures declined on Monday, pressured by weaker rival Dalian oils, while stronger crude oil prices and a softer ringgit capped the fall.

The benchmark palm oil contract FCPO1! for September delivery on the Bursa Malaysia Derivatives Exchange lost 12 ringgit, or 0.29%, to 4,106 ringgit ($959.79) a metric ton at the midday break.

The contract rose in the last three consecutive sessions.

Higher crude oil prices during Asian hours limited the decline on palm prices despite weaker Dalian palm olein, a Kuala Lumpur-based trader said.

“The weaker ringgit also lent support to the market,” the trader added.

Dalian’s most-active soyoil contract (DBYcv1) fell 0.81%, while its palm oil contract CPO1! shed 0.87%. Soyoil on the Chicago Board of Trade (CBOT) added 0.88%.

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

Oil jumped to their highest since January as the United States’ weekend move to join Israel in attacking Iran’s nuclear facilities stoked supply worries.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit USDMYR, palm’s currency of trade, weakened 0.66% against the dollar, making the commodity cheaper for buyers holding foreign currencies.

Palm oil may retest support of 4,072 ringgit per metric ton, a break below which could trigger a drop into the 3,998-4,042 ringgit range, Reuters technical analyst Wang Tao said.
Source: Reuters