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Malaysian palm oil futures fell 7.5% on 21 April to their lowest since August 2019, following a collapse in US crude oil futures that settled negative the previous day. Palm oil's biodiesel demand weakened as the energy price slump made palm-based biodiesel uneconomic against gas oil.
Chinese soyabean oil and palm oil futures also fell on the Dalian exchange.
Palm oil prices are closely tied to crude oil through biodiesel blending economics, so the energy price collapse removes a key demand support and points to continued price weakness.
ofimagazine.comQuartz Business MediaApr 30, 2020After 51 past bearish macro events, Palm Oil moved a median -1.3% over 5 sessions (35% higher; middle half -4.1% to +1.1%), and -1.8% over 20.
After 565 past bearish macro events, Crude Oil (WTI) moved a median -1.4% over 5 sessions (41% higher; middle half -5.9% to +3.0%), and -0.5% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
The crude oil collapse made palm biodiesel uneconomic and weakened a key demand channel, but the 7.5% fall was on 21 April, before the 5-day window, so it is background pressure.
