SINGAPORE: Malaysian palm oil futures fell on Tuesday as a rapidly advancing U.S. soybean harvest and a recovering ringgit weighed on prices, though strong demand limited losses.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange closed down 85 ringgit, or 2.3% to 3,668 ringgit ($766.88) a metric ton.
There is an anticipated increase in production and stock levels for October, said Mitesh Saiya, trading manager for Mumbai-based Kantilal Laxmichand & Company.
Exports of Malaysian palm oil products for Oct. 1-20 were estimated to have risen between 7.9% and 9.9% from a month earlier, data from AmSpec Agri Malaysia and Intertek Testing Services showed.
Rapidly advancing U.S. soybean harvest is likely to boost supplies of the oilseed and its products, including soyoil. Palm oil is affected by price movements in related oils as they compete for a share of the global vegetable oils market.
U.S. farmers had harvested three-quarters of their soybean crop by Sunday, according to weekly data from the U.S. Department of Agriculture (USDA) on Monday.
The figures, roughly in line with trade expectations, were ahead of the five-year average pace for each crop.
The appeal of palm oil as a fuel source also diminished due to weak crude prices, while a weak ringgit and robust export data helped losses, Mitesh added.
Both Brent and U.S. West Texas Intermediate crude futures fell on Monday amid the Israel-Hamas war, and were broadly stable on Tuesday. Weaker crude makes palm a less attractive option for biodiesel feedstock.
The Malaysian ringgit, palm’s currency of trade, strengthened 0.2% against the dollar after hitting its lowest since 1998 in the previous session.
Dalian’s most-active soyoil contract fell 1.6%, while its palm oil contract was down 1.6%.
Soyoil prices on the Chicago Board of Trade fell 1.8%, reaching its lowest price in four months.
Comments
Comments are closed for this article.