Palm trades at a tight range, as a strong crude oil offsets slowing exports
Malaysian palm futures were in a tight trading range on Wednesday as higher?crude prices supported the market while concerns about sluggish?exports and 'elevated inventories' continued to weigh.
The benchmark palm?contract? for March delivery at Bursa Derivatives Exchange rose 3 ringgit (0.08%) to $3,965 ringgit (970.39 USD) per metric ton. The contract dropped 1.39% over the last three sessions, and reached a six-month high.
David Ng, a 'proprietary trader' at Kuala Lumpur based trading firm Iceberg X Sdn. Bhd., stated that the market is still concerned about a?weak export and high stock level in the country.
Ng said that the prices were supported by the recovery in Chicago's soybean oil and crude oil market.
Dalian's most active soyoil contract dropped 0.89% while its palm oil contract lost 1%. The Chicago Board of Trade reported a 0.17% decline in soyoil.
Palm?oil monitors the price changes of competing edible oils as it competes to gain a share in the global vegetable oil market.
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 0.07% 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 biofuel blend?mandates in the first quarter of 2019. These were expected to be finalized in late October.
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)
