MUMBAI: Malaysian palm oil futures remained largely unchanged on Thursday, as lower stocks-induced bargain buying countered pressure from slowing exports and concerns about biodiesel demand after a slump in crude oil prices.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange fell 2 ringgit, or 0.05%, to 3,668 ringgit ($786.79) by the midday break. It fell 1.7% on Wednesday.
“The market should find support from falling production and stocks, but concerns about demand are overpowering other factors,” said a New-Delhi-based dealer with a global trade house.
Exports of Malaysian palm oil products for Dec. 1-10 fell 4.1% to 7.4% from the Nov. 1-10 period, cargo surveyors said. Malaysia’s palm oil stocks at the end of November fell for the first time in seven months as production slumped more than exports, data from industry regulator showed on Tuesday.
The drop in soyoil and sunflower oil prices over the past few days has also been putting pressure on palm oil, the dealer said.
Soyoil futures on the Chicago Board of Trade were up 0.12% after losing 2.5% in the previous two sessions.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Chicago soybeans were largely unchanged on Thursday after a two-day slide, as expectations of rains in Brazil’s parched oilseed producing regions continued to pressure prices.
Argentina, a leading soyoil exporter, allowed the peso currency to plunge over 50% to 801 per dollar on Wednesday.
Oil prices rose in Asian trade on Thursday, extending previous gains, on a bigger-than-expected weekly withdrawal from US crude storage and hopeful demand expectations after the US Federal Reserve sent signals on lower borrowing costs in 2024.
Palm oil may revisit its Dec. 7 low of 3,641 ringgit per metric ton as the bounce from this level has been deeply reversed, Reuters’ technical analyst Wang Tao said.