Malaysian palm oil futures charted their first decline on Friday evening after two consecutive winning sessions, tracking weaker soyaoil on the Chicago Board of Trade. Traders said the market is likely to weaken on caution ahead of the US presidential elections next Tuesday. "Palm is likely to remain sideways until after the elections," said a futures trader in Kuala Lumpur.
Benchmark palm oil futures for January on the Bursa Malaysia Derivatives Exchange were down 1.4 percent at 2,736 ringgit ($652) a tonne at the end of the trading day. The December soyabean oil contract on the Chicago Board of Trade was down 1 percent. Palm's price movements are impacted by its rival edible oils, as they compete for a share in the global vegetable oils market.
Palm also saw its first week of losses after three weekly gains. It is down 1.9 percent so far this week, after hitting a near two-week low of 2,712 ringgit on Wednesday. Traded volumes stood at 29,870 lots of 25 tonnes each on Friday evening, versus the 2015 daily average of 44,600 lots. Palm prices were also dampened by forecasts of rising inventories in Malaysia, the world's second-largest producer of the tropical oil.
October inventories are seen rising 8.8 percent from September to 1.68 million tonnes, its strongest monthly gain since August 2015, according to a Reuters survey of eight planters, traders and analysts. Official palm data for the month of October will be released on November 10 by industry regulator, the Malaysian Palm Oil Board. In related competing oils, the January soyabean oil contract on China's Dalian Commodity Exchange was down 0.9 percent, while the January contract for palm olein on China's Dalian Commodity Exchange rose 0.3 percent. Palm oil is expected to test resistance at 2,786 ringgit per tonne, according to Reuters market analyst for commodities and energy technicals Wang Tao.