Malaysian palm oil futures closed lower on Thursday, erasing the previous session’s gains, as the contract tracked losses in soyoil at Dalian and Chicago futures.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange lost 41 Malaysian ringgit, or 0.92%, to 4,434 ringgit ($1,057.22) a metric ton.

“Today’s futures are tracking weaknesses from both Dalian and Chicago markets, with soyoil under focus,” a Kuala Lumpur-based trader said.

A Brazilian judge on Wednesday left in place a moratorium on trading in soy grown in recently deforested parts of the Amazon, according to a decision seen by Reuters, rejecting a request by a farmer group to reverse an injunction related to the ban.

The moratorium is a two-decade-old private pact barring soybean traders from buying from farmers who cleared Amazon land after July 2008.

Chicago soybean futures fell for a second straight session, pressured by weaker soyoil after a U.S. biofuels proposal disappointed the market.

The U.S. Environmental Protection Agency on Tuesday issued a proposal for reallocating biofuel blending obligations waived under the Small Refinery Exemption (SRE) program to large refineries.

Dalian’s most-active soyoil contract (DBYcv1) declined 1.64%, while its palm oil contract CPO1! fell 2%. Soyoil prices on the Chicago Board of Trade (CBOT) ZL1! lost 0.73%.

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

According to cargo surveyor Intertek Testing Services, exports of Malaysian palm oil products for September 1-15 rose 2.6% compared to August 1-15, while according to independent inspection company AmSpec Agri Malaysia, they fell 0.1%.

The ringgit USDMYR, palm’s currency of trade, weakened 0.17% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Source: Reuters