KUALA LUMPUR: Malaysian palm oil futures slipped on Tuesday after five straight sessions of gains, as Chicago soyoil prices tumbled on news that the US would delay implementing import tariffs on Mexico and Canada.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange slid 90 ringgit, or 2.06%, to 4,277 ringgit ($960.04) a metric ton at the midday break.
The crude palm oil futures were dragged down by weakness in the Chicago soyoil market, a Kuala Lumpur-based trader said.
“The news that the US will postpone imposing import tariffs on Mexico and Canada caused a heavy sell-off in Chicago soybean oil this morning,” the trader said.
Soyoil prices on the Chicago Board of Trade were down 3.48%.
The Dalian Commodity Exchange was closed for the Chinese Lunar New Year and will reopen on Wednesday.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices retreated after US President Donald Trump agreed to hold off imposing steep tariffs on Mexico and Canada, the two biggest foreign oil suppliers to the United States, for a month.
Brent crude futures fell 0.78% to $75.38 a barrel by 0505 GMT.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.29% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Brazil’s 2024/25 soybean crop is expected to reach a record 174 million metric tons, agribusiness consultancy Celeres said, bumping up its forecast from a prior 170.8 million tons due to positive weather conditions.
Palm oil may retrace into a range of 4,265 ringgit to 4,315 ringgit per ton, as it failed to break resistance at 4,402 ringgit, Reuters technical analyst Wang Tao said.
