SINGAPORE: Malaysian palm oil futures were flat on Tuesday, as the effect of a fall in crude oil prices was offset by recovering rival oils and strong export data.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange remained unchanged at 3,718 ringgit ($793.09) a metric ton during the midday break.
Palm futures were largely stagnant today, with little additional positive data to sustain buying interest, said Sathia Varqa, senior analyst with Fastmarkets Palm Oil Analytics.
According to cargo surveyor Intertek Testing Services, exports of Malaysian palm oil products for Sept. 1-25 rose 17.5% to 1.1 million tons from 974,235 tons shipped during Aug. 1-25.
According to independent inspection company AmSpec Agri Malaysia, exports of Malaysian palm oil products rose 15.2% to 1.09 million tons from 945,155 tons shipped during August 1 – 25 during the same period.
The US Department of Agriculture (USDA) reported that soybean harvests advanced more slowly last week than analysts had expected. Dalian’s most-active soyoil contract rose 0.3%, while its palm oil contract was up 0.2%.
Palm near 3-month low on weaker rival oils, concerns over rising supply
Soyoil prices on the Chicago Board of Trade traded flat. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices fell on Tuesday amid concerns that fuel demand will be crimped by major central banks holding interest rates higher for longer, even with supply expected to be tight.
The Malaysian ringgit, palm’s currency of trade, weakened 0.1% against the dollar, and last traded at 4.69 ringgit.
A weaker ringgit makes palm oil more attractive for foreign currency holders.
According to Refinitiv Commodities Research, a worsening drying trend will emerge in October for Indonesia, the biggest palm oil producer in the world.
Palm oil is biased to rest a support zone of 3,636 ringgit to 3,650 ringgit per metric ton, a break below which could open the way towards 3,561 ringgit, said Reuters technical analyst Wang Tao.