SINGAPORE: Malaysian palm oil futures fell nearly 10% on Monday, on track for their biggest drop in more than 16 months, as rival Chicago Board of Trade soyoil declined amid worries over a possible U.S. move to reduce biodiesel production.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange fell 363 ringgit, or 9.9%, to 3,300 ringgit a tonne by the midday break, extending losses into a sixth session and hitting its lowest since Feb. 4.
Last week, palm posted its first weekly drop in three weeks, falling 11.3% on worries over tepid June exports and forecasts of higher stocks and output.
“Bursa Malaysia Derivatives Exchange crude palm oil futures are trading sharply lower following bearish momentum in CBOT (Chicago Board of Trade) soy oil futures,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
CBOT soyoil prices fell 3.4% to their lowest in nearly four months. U.S. President Joe Biden’s administration, under pressure from labour unions and senators including from his home state of Delaware, is considering ways to provide relief to U.S. oil refiners from biofuel blending mandates, three sources familiar with the matter said.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may test a support at 3,602 ringgit to 3,635 ringgit per tonne, a break below which could open the way towards the range of 3,447-3,506 ringgit, Reuters technicals analyst Wang Tao said. – Reuters