Malaysian palm oil futures edges up amid uncertainty over US trade deals
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained RM25, or 0.59 per cent, to RM4,250 (US$1,004.73) a tonne at the midday break. The contract lost about 2.1 per cent on Monday.
Crude palm oil futures were higher following overnight strength in Chicago and South American soyoil futures, said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group.
However, Bagani said the lack of confirmation regarding any trade deals between the US and major Asian countries, apart from Indonesia, continues to fuel volatility in the markets.
"The weakness seen in Chicago soyoil and rapeseed oil, combined with a stronger Malaysian ringgit, capped the gains," he said.
Dalian's most-active soyoil contract fell 0.59 per cent, while its palm oil contract shed 0.31 per cent. Soyoil prices on the Chicago Board of Trade were down 0.91 per cent.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices edged down as concerns that the brewing trade war between major crude consumers the US and the European Union will curb fuel demand growth by lowering economic activity weighed on investor sentiment.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm's currency of trade, strengthened 0.07 per cent against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.
Palm oil may retest support at RM4,198 per tonne, a break below which could open the way toward RM4,150, Reuters technical analyst Wang Tao said.
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