JAKARTA: Malaysian palm oil futures retreated on Monday, weighed down by weakness in Chicago soyoil and elevated stockpiles, while stronger edible oils on the Dalian exchange capped losses.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange fell 3 ringgit, or 0.06%, to 4,766 ringgit ($1,168.14) a metric ton at the close.
“The mixed performance of Dalian palm olein and Chicago soybean oil futures prompted cautious trading. Meanwhile, upside potential remain limited by Malaysia’s elevated palm oil inventories,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract rose 0.4%, while its palm oil contract gained 0.58%. Soyoil prices on the Chicago Board of Trade were down 0.09%.
Palm oil tracks rival edible oils as it competes for a share of the global vegetable oils market.
Another trader said the contract was also pressured by market speculation around Malaysia weighing the waiver of export taxes on crude palm oil to boost shipments and reduce high stockpiles.
Malaysia’s agricultural exports were down 5.7% in September, amid declining shipments of palm oil and palm oil-based products, government data showed on Monday.
Palm oil mills in Indonesia’s West Kalimantan province reduced processing of fresh fruit bunches in September as lower river levels disrupted palm oil transportation.
Oil prices slipped on Monday after US President Donald Trump waived sanctions and tariffs on Russia that may lead to more Russian fuel exports.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Palm oil may climb into a range of 4,799 to 4,820 ringgit per metric ton, as it has broken a resistance at 4,766 ringgit, Reuters technical analyst Wang Tao said.