Palm oil ticks lower on weaker crude, soybean oil prices

KUALA LUMPUR: Malaysian palm oil futures fell for a third straight session on Tuesday to hover at nine-month lows, pressured by losses in crude prices and rival soybean oil as the coronavirus outbreak saps demand.

The benchmark palm oil contract, for July delivery, on the Bursa Malaysia Derivatives Exchange slid 12 ringgit, or 0.59%, to 2,006 ringgit ($459.56) per tonne by 0236 GMT.

Palm fell nearly 3% in the previous session to its lowest since July 23, 2019.


FUNDAMENTALS

Oil prices slumped further on Tuesday, after US oils plunged 25% in the previous session, on worries about limited capacity to store crude worldwide and expectations that fuel demand may only recover slowly as pandemic-induced restrictions are gradually eased.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

European Union palm oil imports in the 2019/20 season stood at 4.6 million tonnes by April 26, down 14% from the year before.

Exports of palm oil products from Malaysia, the world's second-largest producer of the commodity, in April 1-25 rose 15% to 965,025 tonnes from the previous month, cargo surveyor Intertek Testing Services said on Tuesday.

Dalian's most-active soyoil contract fell 0.89%, while its palm oil contract dipped 0.46%. Soyoil prices on the Chicago Board of Trade were down 0.39%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Palm oil still targets its July 10, 2019 low of 1,916 ringgit per tonne, as it has cleared a support at 2,084 ringgit, Reuters technical analyst Wang Tao said.

MARKET NEWS
Asian shares and U.S. stock futures dipped into the red on Tuesday, erasing earlier gains as a renewed decline in oil prices overshadowed optimism about the easing of coronavirus-related restrictions seen globally.