Palm falls on profit-taking, weak demand

Malaysian palm oil futures declined on Wednesday, ending a two-session rally as traders booked profits and export demand softened. The November contract on the Bursa Malaysia Derivatives Exchange closed down 13 ringgit, or 0.26%, at 4,960 ringgit ($1,226.81) per metric ton. Dalian's most active soyoil contract gained 0.45% while its palm contract lost 1.04%, and Chicago soyoil slipped 0.34%.

Business Recorder reported that Paramalingam Supramaniam, a director at brokerage Pelindung Bestari, saw the market selling off on profit-taking while palm sector demand stayed weak. Cargo surveyors estimated that August exports of Malaysian palm oil products fell between 6.5% and 14.9% compared with a month earlier. Supramaniam also said India appears well stocked, and high palm prices are unlikely to appeal to Indian buyers, while traders are waiting for Malaysian Palm Oil Association figures on August output and whether hot, dry weather has hurt production.

Oil prices were roughly flat after reaching one-month highs earlier, as traders weighed supply risks tied to overnight US and Iranian strikes against evidence that crude is still flowing. Higher crude futures make palm a more appealing feedstock for biodiesel. Meanwhile the ringgit, the currency in which palm trades, fell 0.17% against the dollar, making the commodity marginally cheaper for buyers using other currencies.