Palm recoups losses early, but stronger ringgit caps advances

The market recovered early losses in Malaysian palm oil on Monday. This was in line with the recovery of Dalian palm oil futures. However, a stronger ringgit had a negative impact on the market.

By midday, the benchmark palm oil contract for February delivery at the Bursa Derivatives exchange in Malaysia rose by 3 ringgit or 0.07% to 4,021 Ringgit ($983.85) per metric ton. Earlier in the day, it fell by 0.32%.

Anilkumar bagani, the head of research for Mumbai-based Sunvin Group, said that "the futures opened lower after a selloff on Chicago's?soyoil?futures Friday night and an early weakness in Dalian’s palm olein?futures in Asian hours."

The?prices then rebounded from the critical support of 4,000 Ringgit in sync with the recovery?in Dalian’s palm olein?futures."

Dalian's soyoil contract, which is the most active contract in the city, fell 1.12%. Its palm oil contract also dropped?0.7% at midday after falling 1.24% earlier in the day. The Chicago Board of Trade's soyoil price remained flat.

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

The palm currency, the Malaysian ringgit, has strengthened by 0.15% against U.S. dollars, increasing the price of the commodity for holders of foreign currencies.

Oversupply concerns and the impact of a possible Russia-Ukraine deal were outweighed by supply disruptions due to increasing tensions between the U.S. and Venezuela.

Palm oil is a better option as a feedstock for biodiesel due to the stronger crude oil futures.

The U.S. Department of Agriculture has confirmed that private export sales of 132,000 tons of U.S. soya beans to China will be delivered in the marketing year 2025/26.

AmSpec Agri Malaysia, an independent inspection company, reported that exports of palm oil-based products from Malaysia for the period December 1-10 were down 10.3% compared to a month ago. Intertek Testing Services reported a 15% drop in exports for the same time period.

(source: Reuters)