KUALA LUMPUR: Malaysian palm oil futures fell on Wednesday, reversing earlier gains, as market participants awaited key official domestic supply and demand data for further direction.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was down 20 ringgit, or 0.47%, to 4,251 ringgit ($993.22) a metric ton at the close.
The contract gained as much as 0.73% in the afternoon session.
Malaysian palm oil futures rallied on anticipation of weak output growth and low stock levels in the country ahead of the Malaysian Palm Oil Board’s (MPOB) key crop report, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
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The MPOB is due to release the supply-demand data for September on Thursday.
Malaysian palm oil falls on profit-taking
Dalian’s most-active soyoil contract fell 1.5%, while its palm oil contract lost 2.05%. Soyoil prices on the Chicago Board of Trade were up 0.49%.
Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
The ringgit, palm’s currency of trade, strengthened 0.12% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Oil prices erased early gains on Wednesday as weak demand fundamentals and rising supply countered elevated risk of supply disruption from conflict in the Middle East and Hurricane Milton in the United States.
Brent crude futures were down 0.16% at 1049 GMT. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Implementation of higher biodiesel mandates in Indonesia, the world’s biggest palm oil producer, is likely to tighten supplies of the vegetable oil, a leading industry analyst said.
Companies that have paid to source agricultural produce that complies with the European Union’s anti-deforestation law would lose out if the EU decides to delay implementing the legislation by a year, industry groups and traders said.
Source: Brecorder
