Palm oil support muted despite modest data from MPOB
Malaysian palm futures were not much changed on Monday as the Malaysian Palm Oil Board (MPOB's) data supported the market. However, gains were limited by weaker November Export figures and a strengthening ringgit.
At the close, the benchmark contract for palm oil delivery in January on the Bursa Derivatives exchange gained 2 ringgit or 0.05% to 4,111 Ringgit ($973.25) per metric ton. The contract dropped by 0.96% during the previous session.
A Kuala Lumpur based trader stated that the MPOB's data on demand and supply had a slightly bullish tone.
The trader said that the upside potential in the market was limited due to the weaker export numbers for November 1-10 and the stronger ringgit.
Exports of Malaysian Palm Oil Products for the period November 1-10 were estimated to have fallen between 9.5% and 12,3% from the same time last month.
Data from MPOB shows that Malaysian palm oil stocks increased for the eighth consecutive month, reaching a 6-1/2 year high at the end of October. The biggest production in a decade overshadowed a surge in exports.
Dalian's palm oil contract, which is the most active contract, gained 0.12%. Chicago Board of Trade soyoil prices rose 0.62%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
Oil prices rose amid optimism that the U.S. shutdown may end soon, boosting demand in the top oil-consuming country of the world and offsetting worries about rising global supplies.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency strengthened by 0.38% in relation to the dollar. This made the commodity slightly cheaper for buyers who hold foreign currencies.
China's customs authority announced that it will begin lifting its ban on U.S. log exports and restoring soybean import licenses to three U.S. companies starting November 10. This is another sign of the easing of trade tensions between China and the United States.
(source: Reuters)
