MUMBAI: Malaysian palm oil futures gave up opening gains on Tuesday to trade lower on slowing exports, with the market eagerly awaiting inventory data for the end of November.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange fell 17 ringgit, or 0.45%, to 3,724 ringgit ($795.39) by the midday break.
The market fell due to weak export numbers in the first 10 days of December and the weakness in soyoil futures, said a Mumbai-based dealer with a global trade house.
Exports of Malaysian palm oil products for Dec. 1-10 fell 4.1% to 7.4% from the Nov. 1-10 period, cargo surveyors said.
“The market was eagerly awaiting production and export data to gauge stock levels. With production growth slowing and stocks falling, this development will provide support to the market,” the dealer said.
Malaysian palm oil gains
Malaysia’s palm oil stocks at the end of November fell 1.09% from the previous month to 2.42 million metric tons, data from the Malaysian Palm Oil Board (MPOB) showed after the market was closed for the midday break.
Soyoil futures on the Chicago Board of Trade fell 0.1%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Indonesia will continue its mandatory 35% biodiesel blending in 2024 and has allocated 13.41 million kilolitres of biodiesel for next year, slightly higher than the 13.15 million kilolitres allotted for 2023. Palm oil is used as feedstock to make biodiesel.
Palm oil may break a resistance zone of 3,775-3,781 ringgit per ton, and rise into a range of 3,813-3,835 ringgit, Reuters’ technical analyst Wang Tao said.
Weather forecasts show northern half of Brazil may still not be getting enough rain to offset drought conditions, which have delayed planting and threatened crops.
Source: Brecorder
