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Palm slips to near two-week low on weaker crude
calendar28-11-2023 | linkHellenic Shipping News | Share This Post:

28.11.2023 (Hellenic Shipping News) - Malaysian palm oil futures extended losses on Monday to its lowest closing in nearly two weeks, as weaker crude outweighedanticipation of lower output and improving demand.

The benchmark palm oil contract FCPOc3 for February delivery on the Bursa Malaysia Derivatives Exchange declined 2ringgit, or 0.05%, at 3,888 ringgit ($831.12) a metric ton, its lowest closing levelin nearly two weeks.

The contract was expected to re-test the 4,000 ringgit mark due to easing production, higher exports and lower end-month stocks, according toSathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

Exports of Malaysian palm oil products during Nov. 1-25 were estimated to be up between 7% and 14% from the previous month, data from surveyors Intertek Testing Services and AmSpec Agri Malaysia showed on Saturday.

However, rising palm oil prices and negative import margins in key buyer India after heavy imports in the past few months have led to lower purchases for December and January shipments, LSEG Agriculture Research said in a note.

Malaysia’s production might fall further in late November due to wet weather conditions across the country, triggering flooding and disrupting harvesting, LSEG wrote.

In related oils, Dalian’s most active soyoil contract DBYcv1 rose 0.22%,while its palm oil contract DCPcv1 ticked up 0.54%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 1.23%.

Palm oil prices are affected by the soyoil prices as they compete for a share in the global vegetable oil market.

Oil prices slipped, with Brent falling toward $80 a barrel, as investors awaited the OPEC+ meeting later this week for an agreement to curb supplies into 2024. O/R

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Source: Reuters (Reporting by Danial Azhar; Editing by Rashmi Aich and Tasim Zahid)