Palm extends loss into fifth session tracking weak soybean
NEW DELHI (June 8): Malaysian palm oil futures extended losses into a fifth straight session on Friday to hit their lowest in one month, tracking weaker soybean prices in Chicago, while slowing demand growth and higher inventories also weighed.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 0.46% at RM2,376 (US$596.69) a tonne at the midday break.
Trading volume stood at 16,735 lots of 25 tonnes.
A Kuala Lumpur-based palm oil trader said palm oil fell because of weakness in the so-called soy complex of soybeans, soyoil and soymeal.
The most-active soybean contract on the Chicago Board of Trade lost 4.9% this week. Soybeans on Friday hit their lowest since Feb. 6 at US$9.72-1/2 a bushel.
"The palm oil market is lower in line with the weakness in soybean which is bearish after the decision by China to start selling soybeans from its state reserves," said another Kuala Lumpur-based palm oil trader.
China will start auctions of soybeans from its state reserves from June 14, the National Grain Trade Centre said.
Palm oil is influenced by movements in rival edible oils and oilseeds as they compete for a share in the global vegetable oils market.
Demand for palm oil continues to be weak.
Malaysia's palm oil exports in May dropped 8.8% from April to around 1.2 million tonnes, independent inspection company AmSpec Agri Malaysia said last week.
In Indonesia, the world's top palm oil exporter, shipments of palm and palm kernel oils plunged 13.6% in April, data from the Indonesia Palm Oil Association showed.
Source: Reuters
