Malaysian palm oil futures fell on Wednesday, erasing gains from the previous session, as they tracked weakness in crude oil and U.S. soyoil prices.
The benchmark palm oil contract FCPOc3 for December delivery on the Bursa Malaysia Derivatives Exchange slid 40 ringgit, or 0.9%, to 4,414 ringgit ($1,054.22) a tonne by midday, after jumping 1.2% on Tuesday.
“Prices were dragged by a fall in crude and soyoil on the Chicago Board of Trade (CBOT),” a Kuala Lumpur-based trader said.
Crude oil prices fell for the second straight day on Wednesday as doubts re-emerged over demand, with COVID-19 cases continuing to rise worldwide and gasoline shortages in some regions. CBOT soybean oil BOc2, meanwhile, fell 0.4%. O/R
Cheaper crude oil makes palm a less attractive feedstock for biofuels.
The palm oil contract on the Dalian Commodity Exchange fell 0.3%, although its soybean DBYv1 rose 0.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Source: Reuters (Reporting by Fathin Ungku; Editing by Rashmi Aich)