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Malaysian palm oil futures fell on Monday, dragged down by weaker prices for rival oils on the Dalian exchange, softer crude oil prices, and expectations of lower exports in the first half of February.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives exchange dropped 28 ringgit, or 0.62%, to 4,471 ringgit (US$1,010.85) per tonne at the start of trade. The contract had gained 0.83% in the previous session.
Dalian's most-active soybean oil contract fell 1.29%, while its palm oil contract slipped 0.38%. The Chicago Mercantile Exchange was closed for a public holiday.
Palm oil tracks price movements of competing vegetable oils, as it vies for a share of the global vegetable oil market.
Crude oil prices fell for a fourth straight session on expectations that a Russia-Ukraine peace deal could ease sanctions disrupting supply flows, alongside concerns that global trade wars could slow economic growth and dampen energy demand.
Lower crude oil prices make palm oil a less attractive feedstock for biodiesel production.
Cargo surveyors estimated that Malaysian palm oil exports fell between 12.3% and 19.9% during 1-15 February compared with the previous month.
The ringgit, palm oil's trading currency, rose 0.2% against the US dollar, making the commodity more expensive for buyers holding foreign currencies.
According to Reuters technical analyst Wang Tao, palm oil could retest support at 4,540 ringgit per tonne, and a break below this level could open the way for a move within the 4,437 to 4,488 ringgit range.
Asian equity markets were quiet due to the Wall Street holiday, while the dollar remained weak following soft US retail sales data, which revived expectations of two interest rate cuts this year.
Source: Reuters