JAKARTA: Malaysian palm oil futures extended losses on Monday, weighed down by weaknesses in rival edible oils on the Dalian exchange, while increased production continued to pressure prices.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange lost RM61, or 1.45 per cent, to RM4,146 (US$981.53) a metric ton by the midday break.
“Futures were weighed down by weaknesses in the Dalian market. There is also an increase in production, which continued to pressure prices. On the other side of the equation, we see good demand creation, which will eventually lead to better exports in November and December,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Dalian’s most-active soyoil contract lost 0.74 per cent, while its palm oil contract shed 1.5 per cent. Soyoil prices on the Chicago Board of Trade (CBOT) gained 0.49 per cent.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Exports of Malaysian palm oil products rose 4.3 per cent month-on-month in October, independent inspection company AmSpec Agri Malaysia said, while they rose 5.2 per cent, according to cargo surveyor Intertek Testing Services.
Indonesia exported 17.58 million tons of crude and refined palm oil in the January-to-September period, up 11.62 per cent from the same period last year, the statistics bureau said on Monday.
Oil prices climbed on Monday after OPEC+ decided to hold off production hikes in the first quarter of next year, which eased rising fears of a supply glut, but weak factory data in Asia capped the gains.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.24 per cent against the dollar, making palm oil more attractive to buyers holding foreign currencies.
US soybean futures hit a 15-month high on Friday, posting their biggest monthly gains in almost five years on hopes of increased Chinese buying, traders said.
Palm oil FCPOc3 is expected to fall into the RM4,106-RM4,145 per metric ton range, as suggested by a projection analysis and a falling channel, said Reuters technical analyst Wang Tao.
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