Palm falls for 7th day on fresh Sino-U.S. trade tension

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KUALA LUMPUR (May 6): Malaysian palm oil futures fell to their lowest in more than five months on Monday, as U.S. President Donald Trump's threats to increase tariffs on Chinese imports risked prospects of a trade deal, sending commodities and stock markets lower. 

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed down 1.3% at 1,984 ringgit (US$478.53) a tonne, posting a seventh consecutive session of losses. 

It earlier fell as much as 2% to 1,970 ringgit, its weakest level since Nov 28.

Palm oil is expected to stabilise around a support range of 1,940-1,967 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

"A possible fall out in the U.S.-China trade talks, after Trump threatened to escalate the year-long trade war and China retaliating by considering delaying the next trade talk is pressuring palm prices further," said a futures trader in Kuala Lumpur. 

"The current weakness in commodities and stock markets around the globe may further see extensions of selling activities."

President Trump dramatically increased pressure on China on Sunday to reach a trade deal, saying he would hike U.S. tariffs on US$200 billion worth of Chinese goods this week and target hundreds of billions more soon.

Stock markets sank and oil prices tumbled, as negotiations were thrown into doubt.

In other related oils, the Chicago May soybean oil contract fell 1.6% on Monday, having lost 1.6% the previous week. 

Chicago soybean prices fell sharply on Monday to their lowest in over seven months, on Trump's trade comments.

Palm oil prices are impacted by movements in soyoil, as the edible oils compete for global market share.

Meanwhile, the May soyoil contract on the Dalian Commodity Exchange rose 0.2%, and the Dalian May palm oil contract DCPK9 declined 1.1%.

Palm, soy and crude oil prices at 1030 GMT

Contract Month Last Change Low High Volume
MY PALM OIL MAY9 0 +0.00 0 0 0
MY PALM OIL JUN9 1960 -23.00 1941 1967 4483
MY PALM OIL JUL9 1986 -24.00 1970 1996 21355
CHINA PALM OLEIN MAY9 4178 -48.00 4092 4242 6644
CHINA SOYOIL MAY9 5220 +12.00 5092 5440 5326
CBOT SOY OIL MAY9 26.65 -0.42 26.63 26.65 124
INDIA PALM OIL MAY9 515.60 -3.10 514.00 517.2 291
INDIA SOYOIL MAY9 732 -3.50 730.4 733.55 5480
NYMEX CRUDE JUN9 61.17 -0.77 60.04 61.45 194603

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel

(US$1 = 4.1460 ringgit)
(US$1 = 69.3500 Indian rupees)
(US$1 = 6.7637 Chinese yuan)