Palm Oil Falls on Weaker Rival Oils, Crude Oil

Malaysian Palm Oil Futures Slide on Monday

Malaysian palm oil futures fell on Monday, tracking weakness in rival edible oils on the Dalian market and lower crude oil prices.

The benchmark August contract on the Bursa Malaysia Derivatives Exchange lost 48 ringgit, or 1.07%, to 4,438 ringgit per metric ton by the midday break.

A Kuala Lumpur-based trader noted, "Prices are expected to trade lower due to weaker Dalian, lower crude oil, and expectations of lower export data."

Cargo surveyors are anticipated to release Malaysia's May 1-25 palm oil export estimates later in the day.

Dalian's most-active soyoil contract dipped 0.97%, while its palm oil contract fell 0.78%. Chicago Board of Trade was closed for a holiday.

Palm oil typically tracks rival edible oils as it competes in the global vegetable oils market.

Crude oil prices dropped 6% to two-week lows amid growing optimism over a US-Iran peace deal. Lower crude makes palm oil less attractive as biodiesel feedstock.

Argentina, a top grain supplier, will gradually cut export taxes on major agricultural products over the next two years.

The ringgit, palm's currency of trade, strengthened 0.3% against the US dollar, making the commodity more expensive for foreign buyers.

Reuters technical analyst Wang Tao sees palm oil testing support at 4,452 ringgit; a break below could open the way to the 4,394-4,421 ringgit range.