Palm extends its losses due to weaker oil rivals, and higher stockpile expectation

Malaysian palm futures declined for a second day on Thursday. They were pressured by lower edible oils on the Dalian and Chicago market and rising expectations.

At closing, the benchmark palm oil contract on Bursa Derivatives Exchange for February delivery fell 47 ringgit or 1.13% to 4,106 Ringgit ($999.03).

Weaker rival oilseeds pushed down crude palm oil futures today. CPO prices fell today as the ringgit strengthened and Chicago soyoil prices dropped overnight by nearly 2%.

Dalian's palm oil contract, which is the most active contract, fell 0.8% while soyoil prices dropped 0.29%. Chicago Board of Trade soyoil prices were down by 0.08%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.

Anilkumar bagani, head of commodity research at Mumbai-based Sunvin Group, says that the contract was also affected by the expectation of increasing stock levels and a subdued demand for exports.

A survey shows that Malaysian palm oil inventories rose to more than a six-and-a half-year high during November as exports plummeted amid record production.

The palm ringgit's trade currency strengthened by 0.27% against dollars, making it slightly more expensive for buyers who hold foreign currencies.

According to a shipping calendar seen by, the U.S. exports of crops to China have increased after a tariff war that halted trade for several months. At least six bulk cargo ships are scheduled to load soybeans on Gulf Coast terminals until mid-December.

Technical analyst Wang Tao stated that palm oil could test support at 4121 ringgit per tonne after failing to break through resistance at 4,202.

(source: Reuters)