Palm extends its fall on Dalian's weakness
Malaysian palm futures declined for the third session in a row on Wednesday. This was due to weakness in Dalian edible oil, a rival.
By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for January delivery had fallen 25 ringgit or 0.55% to 4,480 Ringgit ($1,060.61) per metric ton.
A Kuala Lumpur based trader stated that "Today futures are tracking Dalian's weakness while waiting for fresh leads to move the markets."
Dalian's palm oil contract, which is the most active contract, lost 0.86%. Chicago Board of Trade soyoil prices were up by 0.22%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
Energy Minister Bahlil lahadalia reported that Indonesian biodiesel consumption for the period January-September was 10.57 million kilograms. This is an increase of nearly 10% compared to 9.61 million kilograms a year ago.
Intertek Testing Services, a cargo surveyor, reported that exports of palm oil products from Malaysia for the period October 1-20 were up 3.4% compared to a month ago. AmSpec Agri Malaysia is an independent inspection company and said that they had increased by 2.5%.
In the face of uncertain palm and soy oil exports, the Malaysian Palm Oil Council stated on Tuesday that crude palm oil prices will remain above 4,400 Ringgit ($1,042) a ton in 2026.
Oil prices rose for a second day, boosted by supply risks related to sanctions and the hope of a U.S. China trade agreement. Investors also digested reports that the U.S. was seeking oil deliveries for its strategic reserves.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency, the dollar, has weakened by 0.02%. The commodity becomes cheaper for foreign currency buyers when the ringgit is weaker.
Technical analyst Wang Tao stated that palm oil could break support at 4,484 Ringgit per ton and fall toward 4,456 Ringgit.
(source: Reuters)
