KUALA LUMPUR (June 3): Malaysian palm oil futures fell by more than 2% to a one-week low on Monday evening for a third straight day of falls, weighed down by broad weakness in global equities and commodities.
Stocks and commodities markets slumped after U.S. President Donald Trump's move to impose a tariff on all goods coming from Mexico, starting at 5%, while investors remain concerned about intensifying Sino-U.S. tensions.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was last down 2% at 2,028 ringgit (US$485.17) a tonne at the close of trade for its sharpest daily decline in a week.
It earlier fell as much as 2.1% to 2,026 ringgit, its weakest since May 27.
Palm oil could fall to 2,030 ringgit, having failed to break resistance at 2,111 ringgit a tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
"Weakness in financial and commodities markets across the board in the wake of trade-war jitters, is likely to spill over and pressure palm oil futures prices," one Kuala Lumpur-based trader said, adding that renewed strength in the ringgit could further dampen market sentiment.
The ringgit, palm's currency of trade, strengthened 0.2% against the dollar to 4.1800 on Monday evening. A stronger ringgit makes palm oil more expensive for foreign buyers.
Meanwhile, oil prices fell more than 1% on Monday, extending declines from Friday. Crude markets finished last week by racking up their biggest monthly losses in six months, amid stalling demand and as trade wars fanned fears of a global economic slowdown.
The Chicago July soybean oil contract fell 0.7% on Friday, after four sessions of gains and was last down 0.9% on Monday.
Corn, wheat and soybean futures dropped on Friday, weighed down by fresh concerns over demand after President Trump threatened to place tariffs on goods imported from Mexico in response to illegal immigration.
In related oils, the September soyoil contract on the Dalian Commodity Exchange slipped 2% and the Dalian September palm oil contract fell 2.2%.
Palm oil prices are affected by movements in soyoil, with which it competes for global market share.
Palm, soy and crude oil prices at 1119 GMT
|MY PALM OIL||JUN9||2003||-36.00||2003||2030||373|
|MY PALM OIL||JUL9||2016||-36.00||2016||2040||4629|
|MY PALM OIL||AUG9||2026||-41.00||2026||2055||16304|
|CHINA PALM OLEIN||SEP9||4378||-98.00||4376||4464||639924|
|CBOT SOY OIL||JUL9||27.33||-0.26||27.31||27.59||8270|
|INDIA PALM OIL||JUN9||512.50||-6.80||511.40||517.2||1473|
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 = 4.1800 ringgit)
(US$1 = 69.2250 Indian rupees)
(US$1 = 6.9064 Chinese yuan)