Malaysian palm oil falls on weaker rival oils, export data eyed

Jakarta - Malaysian palm oil futures slipped on Thursday, ending a three-day uptrend as weaker competing vegetable oils on the Dalian and Chicago markets put pressure on prices, while traders awaited export data for potential demand signals. The benchmark December palm oil contract on the Bursa Malaysia Derivatives Exchange fell by 0.72% to 4,666 ringgit ($1,143.63) per metric ton by midday.

The FCPO, which tracks the crude palm oil futures contract, mirrored the weakness observed in the Dalian market and Chicago soyoil pricing while awaiting export data, according to a Kuala Lumpur-based trader. Dalian's main soyoil contract declined 1.66%, and its palm oil contract slipped 2.15%. Soyoil prices on the Chicago Board of Trade dropped by 0.64%.

Palm oil prices follow rival edible oils, as they vie for a share of the global vegetable oils market. On Thursday, oil prices declined more than 1% as investors considered risks to supply stemming from attacks on shipping in the Strait of Hormuz against US efforts to reduce petroleum shipping costs by easing sanctions on vessels.

A weaker crude oil futures price made palm oil a less appealing choice for biodiesel feedstock. On Wednesday, Malaysia reduced its November crude palm oil reference price, maintaining the export duty at 10%. The ringgit, palm's currency of trade, strengthened by 0.02% against the dollar, rendering the commodity slightly costlier for buyers using foreign currencies.

Palm oil may test a support level at 4,622 ringgit per ton, a breach of which could open the way toward the 4,567-4,588 ringgit range, says Reuters technical analyst Wang Tao.