KUALA LUMPUR: Palm oil for August delivery on Bursa Malaysia Derivatives dropped as much as 1.1% to RM2,300 a ton on Wednesday, lowest intraday level for most-active contract since July 2016.
The CPO futures was at RM2,303 by midday break; down 8% year-to-date.
The prices fell for 8th straight day, heading for the longest run of losses since June 2016
Sentiment is bearish after Malaysia’s crude palm oil export tax, which may affect short-term demand, says Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental in Mumbai.
There are concerns that sluggish demand and palm oil’s high production season from July onward will lead to higher inventories.
Weakness in U.S., China edible oil markets is also adding to the weak sentiment
Soybean oil for December delivery on Chicago Board of Trade -0.1% to 30.81 cent a pound, November soybeans -1% to US$9.65 per bushel.
Soybean oil’s premium over palm oil at US$103 a ton, highest since Jan 2, vs average of US$102 over past year, according to data compiled by Bloomberg.
Palm oil’s discount to gasoil at US$85 a ton vs avg premium of ~$65 over past year, according to data compiled by Bloomberg.
Refined palm oil for September delivery on Dalian Commodity Exchange falls as much as 2% to 4,826 yuan a ton, lowest intraday level for most-active contract since February 2016.
September soybean oil -1.2% to 5,634 yuan/ton. - Bloomberg