Palm snaps four-session rally due to high stock prices

Malaysian palm futures ended a four session rally on Monday. They were weighed down by increased inventories but kept in check by expectations of declining?production and firmer demand.

By the close, the benchmark palm oil contract on Bursa Derivatives Exchange for March delivery had fallen 40 ringgit or 0.98% to 4,049 Ringgit ($997.78). David Ng is a proprietary trader with Kuala Lumpur's trading firm Iceberg X Sdn. Bhd. He said that the market was under pressure due to a negative sentiment about?high stock level.

Ng stated that prices will be supported in the short term by the expectation of slower production and stronger demand in the coming week.

Malaysian Palm Oil Board is expected to release their December supply and demand data on January 12. The Malaysian Palm Oil?Board is expected to release its December supply and?demand data on January?12.

Dalian's palm oil contract, which is the most active contract in Dalian, lost 0.61% while soyoil prices fell by 0.28%. Prices of soyoil on the Chicago Board of Trade fell by 0.1%.

Palm oil follows the price movement of competing edible oils that are vying for a piece of the global vegetable oil market. Prices of crude oil rose by $1.50 as investors weighed the potential disruption to oil supplies in the Middle East against the talks between U.S. presidents and Ukrainian leaders on an end to the war in Ukraine.

Palm oil is more attractive as a biodiesel feedstock due to the stronger crude oil futures.

The palm ringgit's trade currency has weakened by 0.32 percent against the dollar. This makes the commodity more affordable for buyers who hold other currencies.

(source: Reuters)