Palm oil prices fall for the fourth consecutive week due to a combination of rising stocks and softer crude

Malaysian palm futures recorded a fourth successive weekly decline on the Friday amid expectations that stocks will be higher at the end of October and a recent drop in crude oil prices.

The benchmark contract for palm oil delivery in January on the Bursa Derivatives exchange lost 39 ringgit or 0.94% to finish at 4,110 Ringgit ($973.01 a metric tonne).

The contract dropped 2.31% in the last week.

Sandeep Singh is the director of The Farm Trade in Kuala Lumpur, a consulting and trading company. He said that palm oil was under pressure because of expectations for higher end stocks and lower crude oil.

Singh said that with palm oil at a discount to soyoil, and technical chart support of 4,080 Ringgit, this level is likely to be a good place for some buying.

Malaysian palm oil inventories are likely to have reached a new high of two years in October as production surged at its highest level in seven year, surpassing the export demand.

Stockpiles will have increased 3.5% in the last month, to 2,44 million metric tonnes. This is the highest level since October 2023.

On November 10, the Malaysian Palm Oil Board will release its monthly statistics.

The oil price rose on Friday, but it was still on course for a second weekly decline after three days of declines due to concerns about an excess supply and a slowdown in U.S. consumer demand.

Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

Dalian's palm oil contract, which is the most active contract, traded at a flat rate. Chicago Board of Trade Soyoil Prices grew by 0.55%.

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

(source: Reuters)