Palm oil slips on weaker soyoil, but crude oil gains cap losses

Malaysian palm oil futures fell slightly on Thursday, tracking weakness in rival soyoils, although losses were capped by a weaker ringgit and stronger crude oil.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange slid 5 ringgit, or 0.25%, to 2,027 ringgit ($467.81) per tonne by 0249 GMT, after gaining 1.9% in the previous session.

FUNDAMENTALS
Oil prices crept up, supported by a surprise decline of U.S. crude inventories, but gains were capped by worries that a potential second wave of the coronavirus pandemic might trigger fresh lockdowns and slam fuel demand once again.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit, palm's currency of trade, weakened 0.12% against the dollar, making the edible oil cheaper for holders of foreign currency.

Stockpiles in Malaysia, the world's second-largest palm producer, rose 18.3% from March to 2.05 million tonnes in April, the highest since December 2019.

Dalian's most-active soyoil contract fell 0.75%, while its palm oil contract dipped 0.09%. Soyoil prices on the Chicago Board of Trade were down 0.5%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

MARKET NEWS
Asia's stock markets fell and gold hit a one-week high as worries about a second wave of coronavirus infections and a dour assessment of the way back from the head of the U.S. Federal Reserve dashed hopes for a quick recovery.