SINGAPORE: Malaysian palm oil futures traded flat on Wednesday, as concerns over rising stockpiles were offset by stronger crude prices.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange last traded at 3,679 ringgit ($770.79) a metric ton at the midday break.
Exports of Malaysian palm oil products for October rose between 6.6% and 8.9% from a month earlier, cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia said on Tuesday.
The rise in exports is being offset by expectations of higher output, according to analysts. Currently, it is the peak season for palm oil production, but inventory levels are expected to come down next month, said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand and Co.
China’s manufacturing activity unexpectedly returned to contraction in October, an official factory survey showed on Tuesday. Dalian’s most-active soyoil contract was up 0.03%, while its palm oil contract was down 0.7%.
A poll of seven analysts showed that US soybean crush likely increased in September to 5.249 million short tons, the largest September crush on record. This increase is expected to boost supplies of soyoil, which competes with palm oil for market share. Soyoil prices on the Chicago Board of Trade fell 0.4%.
Crude oil prices edged up ahead of key global central bank meetings this week including the US Federal Reserve. The market also closely watched the latest developments in the Israel-Hamas conflict. Stronger crude makes palm a more attractive option for biodiesel feedstock.
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