KUALA LUMPUR: Malaysian palm oil futures reversed early gains on Thursday as profit-taking weighed on the market following the release of the Malaysia Palm Oil Board’s (MPOB) demand and supply data.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 17 ringgit, or 0.4%, to 4,235 ringgit ($987.64) a metric ton at the close.
The contract rose to about 0.78% in the afternoon but has fallen 2.49% for three consecutive sessions. Malaysian palm oil futures retreated on profit-taking following the release of the MPOB data, which the market interpreted as mildly bearish, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
“The factors influencing palm prices moving forward will be Malaysia’s October production, the direction of competing oils, and weather uncertainties in South America,” he said.
MPOB released its supply-demand data for September during the midday break. It stated that Malaysia’s palm oil stocks at the end of September rose 6.93% from the previous month, the highest level in eight months, while crude palm oil production was down 3.80%, and palm oil exports grew 0.93%.
Dalian’s most-active soyoil contract rose 0.2%, while its palm oil contract fell 0.23%. Soyoil prices on the Chicago Board of Trade were up 0.09%.
Palm oil tracks price movements in rival edible oils as they compete for a share of the global vegetable oils market. The ringgit, palm’s currency of trade, weakened 0.19% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Oil prices edged higher, underpinned by a spike in fuel demand as a major storm barrelled into Florida, with Middle East supply risks also in focus.
Brent crude futures for December were up 1.55% at $77.77 a barrel as of 1045 GMT. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Source: Brecorder
