Malaysian palm oil drops 2% on rising stock concerns and weak soybean oil

Malaysian palm oil futures experienced a significant drop of over 2%, marking its largest decrease in a month, due to anticipated stockpile increases and tracking losses in soyoil following better-than-expected U.S. soybean crop conditions. The September delivery contract for palm oil on the Bursa Malaysia Derivatives Exchange fell by 2.08% to 3,958 ringgit a metric ton. This decline is linked to the rise in palm oil inventories in Malaysia, which have increased for three consecutive months, and the need for exports to rise in order to lower stocks. Additionally, the drop in soyoil futures, influenced by improved U.S. crop ratings, also impacted the palm oil market.

Malaysian palm oil futures fell more than 2% on Tuesday, their biggest drop in a month, due to an expected rise in stockpiles and tracking losses in rival soyoil, following better-than-expected crop conditions for the U.S. soybean crop. The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange fell 84 ringgit, or 2.08%, to 3,958 ringgit ($841.05) a metric ton. The contract gained 3.2% last week. “With the palm oil market closed on Monday, it is now catching up with soyoil’s drop over the past two days,” said a Mumbai-based dealer with a global trade house. U.S. soyoil futures BOcv1 were down 1.8% after losing 0.9% on Monday. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Palm oil stocks have risen in Malaysia, and to bring them down, exports need to pick up, which will happen only if prices correct, the dealer said. Palm oil inventories in Malaysia, the world’s ...