MUMBAI: Malaysian palm oil futures fell in early trade on Thursday to their lowest in three weeks, tracking weakness in soyoil and palm oil contracts in the Dalian market and a stocks buildup in producing countries.
Palm oil ends higher on rising inventories
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was down 37 ringgit, or 0.95%, at 3,864 ringgit a metric ton.
Fundamentals
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Dalian’s most-active soyoil contract fell 0.44%, while its palm oil contract was down 0.28%. The Chicago Board of Trade soyoil edged up 0.05%.
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Palm oil tracks price movements in related oils as they compete for a share in the global vegetable oils market.
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Malaysia’s palm oil stocks jumped to a six-month high in August, as monthly production reached a nine-year high amid a slowdown in exports, the industry regulator said on Tuesday.
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The Malaysian ringgit, palm’s currency of trade, eased 0.14% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.
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Indonesia, the biggest palm oil exporter, plans to lower export duties to improve competitiveness and raise farmers’ income.
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Oil prices rose during Asian trade on Thursday, spurred by concerns of storm impacting output in the US, the world’s biggest crude producer, though worries of lower demand capped gains.
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Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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Palm oil is poised to break support at 3,856 ringgit per metric ton and fall towards 3,782-3,796 ringgit range, according to Reuters’ technical analyst Wang Tao.
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