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Saturday, December 9, 2023

Palm near 3-month low on weaker rival oils, concerns over rising supply

SINGAPORE: Malaysian palm oil futures traded flat at closing on Friday but held near three-month lows after a third straight weekly decline as weakness in rival oils and concerns over rising supply outweighed support from strong export data.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange traded flat at 3,681 ringgit ($785.70) a metric ton at closing. It has declined 2.8% this week.

Soybean futures are falling due to an expanding U.S. harvest and economic worries, said Sandeep Singh, director of Kuala Lumpur-based trading and consulting company The Farm Trade.

Additionally rising stocks in Malaysia are impacting the edible oil complex, and palm oil is experiencing sustained pressure as a result, Singh added.

Soybeans were poised for weekly losses in light of freshly harvested U.S. crops adding to ample South American supplies.

Exports of Malaysian palm oil products for Sept. 1-20 rose 2.4% from Aug. 1-20, cargo surveyor Intertek Testing Services said on Wednesday.

Palm oil closes at one-week low on weaker rival oils

Independent inspection company AmSpec Agri Malaysia said exports during the same period rose 1.8%.

Dalian’s most-active soyoil contract fell 0.8%, while its palm oil contract was down 0.2%. Soyoil prices on the Chicago Board of Trade climbed 0.3%.

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

The ringgit, palm’s currency of trade, held steady against the dollar at 4.69. A weaker ringgit makes palm oil more attractive for foreign currency holders.

Malaysia’s consumer price index (CPI) rose 2.0% in August from the same period a year earlier, government data showed on Friday.

Palm oil may fall into a range of 3,360-3,501 ringgit per metric ton in the fourth quarter, before reversing to rise towards its July high of 4,209 ringgit, said Reuters technical analyst Wang Tao.

Palm near 3-month low on weaker rival oils, concerns over rising supply

Source: Brecorder

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