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By Mei Mei Chu
KUALA LUMPUR, Aug 15 (Reuters) – Malaysian palm oil futures dropped over 2% on Monday, as traders booked profits after prices hit a six-week closing high in the last session, while weaker soyoil also weighed on sentiment.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange slid 112 ringgit, or 2.54%, to 4,295 ringgit ($964.73) a tonne by the midday break.
Exports of Malaysian palm oil products for Aug. 1-15 rose 2.8% to 533,050 tonnes from the same week in the previous month, cargo surveyor Intertek Testing Services said.
Commodities across the board, whether crude, metals or gas, are trading in negative territory, and this is pushing agricultural commodities lower as well, said Mohsin Mohammad, director at Selangor-based cooking oil exporter Sarafiah Natural Resources.
U.S. soybean production will be bigger than previously forecast as better-than-expected yields will more than make up for a cut to acreage, the U.S. government said on Friday.
Soyoil prices on the Chicago Board of Trade BOcv1 were down 2.2%. Dalian’s most-active soyoil contract DBYcv1 fell 0.8%, while its palm oil contract DCPcv1 rose 0.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices dropped for a second straight session as weak China economic data triggered concerns about demand in the world’s largest crude importer, making palm a less attractive option for biodiesel feedstock. O/R
Palm oil faces a resistance at 4,452 ringgit per tonne, and it may hover below this level or retrace towards a support at 4,269 ringgit, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.4510 ringgit)
(Reporting by Mei Mei Chu; Editing by Rashmi Aich and Subhranshu Sahu)
((Meifong.chu@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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