Palm oil futures fell for the first time in eight days after crude oil extended a decline, reducing the appeal of the tropical commodity for use in biodiesel. The October-delivery futures dropped as much as 0.8 percent to 2,429 ringgit ($753) a metric ton on the Malaysia Derivatives Exchange. The most-active contract was at 2,440 ringgit a ton at 3:29 p.m. Oil slid for a fourth day after the Thomson Reuters/University of Michigan preliminary consumer sentiment index for July fell to 66.5 from 76 in June, the lowest level since August. August-delivery crude fell as much as 0.7 percent to $75.50 a barrel on the New York Mercantile Exchange. “The decline in crude oil is raising concerns about palm oil’s biodiesel appeal,” said Badruddin Khan, assistant vice president for research at Angel Commodities Ltd. in Mumbai. “There’s also a bit of profit-taking after the rally, which may not be fully backed by fundamentals.” The commodity had its first weekly gain in four last week and reached a six-week high on speculation that demand for the most-consumed vegetable oil will increase as Asian nations approach the festival season. China, India, Pakistan and Indonesia mark their important festivals in the quarter ending September, with communal meals stoking edible oils consumption. The gain in palm oil output in Indonesia, the top producer, may exceed the growth in demand, pressuring prices in the coming months, Khan said. Production in Malaysia, the second- largest, climbed 2.5 percent to 1.42 million tons in June, the nation’s Palm Oil Board said last week. “Production is going to be better everywhere and there’s an overhang of inventory,” Khan said. The tropical oil could fall as low as 2,200 ringgit a ton, unless it “removes 2,500 ringgit with a strong breakout momentum,” a RHB Research Institute Sdn. report said today, citing technical charts. Palm oil also tracked soybeans and soybean oil lower. December-delivery soybean oil in Chicago fell as much as 0.6 percent to 38.81 cents a pound today while soybeans for November delivery slumped as much as 1.3 percent to $9.7225 a bushel on the Chicago Board of Trade. CME Group Inc.’s September-delivery palm oil contract, which is pegged to the Malaysian benchmark price, rose 8 percent to $763.75 a ton on July 15, the most since the contract started trading in May. On the Dalian Commodity Exchange, January-delivery palm oil closed little changed at 6,536 yuan ($964) a ton while soybean oil fell 0.2 percent to 7,562 yuan a ton. To contact the reporters on this story: Thomas Kutty Abraham in Mumbai at Or tabraham4@bloomberg.net; Claire Leow in Singapore at cleow@bloomberg.net

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