JAKARTA: Malaysian palm oil futures ended lower on Tuesday, weighed down by a strong ringgit, while market participants awaited cues on inventories and demand from the Malaysian Palm Oil Board (MPOB) data due the next day.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange lost 7 ringgit, or 0.16%, to 4,481 ringgit ($1,066.40) a metric ton at closing.
Palm rises on stronger rival oils, crude
Malaysia’s palm oil inventories are forecast to rise for a sixth consecutive month in August, as production continues to outpace exports despite a recovery in demand, a Reuters survey showed.
“Today, CPO future is tracking moderate movement from Dalian palm oil and strong ringgit while waiting for tomorrow’s MPOB data for new leads,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract was unchanged, while its palm oil contract was up 0.51%. Soyoil prices on the Chicago Board of Trade (CBOT) gained 0.12%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices gained on Tuesday after OPEC+ decided to increase production by less than what market participants had anticipated, while concerns over tighter supply due to potential new sanctions on Russia continued to lend support.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit palm’s currency of trade, strengthened 0.31% against the dollar, making the commodity more expensive for buyers holding other currencies.
Palm oil may test resistance at 4,506 ringgit per metric ton, with a good chance of breaking above it and rising toward 4,568 ringgit, Reuters technical analyst Wang Tao said.
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