Palm range bound as strong Chicago soyoil counters slow exports
Malaysian palm futures were traded in a tight range on Wednesday as concerns about sluggish?exports and high inventories continued to?pressurize the market. However, stronger Chicago soyoil prices and crude oil supported prices.
At the midday break, the benchmark March palm oil contract on Bursa Derivatives Exchange fell 5 ringgit or 0.13% to 3,957 Ringgit ($969.14), a metric tonne. The contract has fallen 1.39% over the last three sessions.
David Ng, a proprietary trader with Kuala Lumpur's Iceberg X Sdn. Bhd, said that the market is still concerned about the low exports and the high stock levels.
Ng said that the price of crude oil and soybean oil in Chicago rose as a result of the recovery on these markets.
Dalian's top-active palm oil contract dropped 0.97%, while the soyoil contract declined 0.73%. Prices of soyoil on the Chicago Board of Trade rose?0.19%.
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 increased by more than 1% following the order of U.S. president Donald Trump to "completely and totally" block all oil tankers sanctioned from entering or leaving Venezuela. This sparked a new round of geopolitical tensions during a period of concern over demand.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's currency has weakened by 0.02% compared to the U.S. dollar. This makes the commodity slightly cheaper for holders of foreign currencies.
The U.S. Environmental Protection Agency anticipates finalizing the 2026 and 2027 mandates for biofuel blending, originally expected to be completed in late October. This is now expected in 'the first quarter next year.
Data from the European Commission showed that the soybean imports of the European Union for the 2025/26 seasons, which began in July, had reached 5.65 millions metric tons on December 14. This was down 13% compared to the same period last year, and palm oil imports were down 12% at 1.35 million tonnes.
(source: Reuters)
