VEGOILS-Palm extends losses on soft demand, rival oil weakness
02.01.2024 (Nasdaq) - Updates with midday prices, adds analyst comment
SINGAPORE, Jan 3 (Reuters) - Malaysian palm oil futures fell for a fourth consecutive session on Wednesday to hit a two-month low, weighed down by soft demand and weakness in soybean prices.
The benchmark palm oil contract FCPOc3 for March delivery on the Bursa Malaysia Derivatives Exchange fell 43 ringgit, or 1.2%, to 3,617 ringgit ($780.87) a metric ton by the midday break.
"Currently, there is no distinct trend observable for palm oil," said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
"Factors moving the market include tepid demand, expectations of a stronger ringgit, and abundant rainfall in Argentina, assisting farmers in sowing soy."
Dalian's most-active soyoil contract DBYcv1 and its palm oil contract DCPcv1 fell 1.8% and 2%, respectively. Soyoil prices on the Chicago Board of Trade BOcv1 declined 1.1%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Abundant rainfall in Argentina's core farming heartlands over recent weeks is favouring soybean production, and analysts expect harvest in the region to this year.
Exports of Malaysian palm oil products for December fell between 2.1% and 9.9% from November, cargo surveyors AmSpec Agri and Intertek Testing Services said on Friday.
Indonesia has lowered its crude palm oil reference price for the Jan. 1-15 period to $746.69 a metric ton, a trade ministry official said on Friday.
The Malaysian ringgit MYR=, palm's currency of trade, weakened 0.70% against the dollar. A weaker ringgit makes palm oil attractive for foreign currency holders.
Palm oil may test support zone of 3,607-3,618 ringgit per ton, a break below which could open the way towards 3,571-3,576 ringgit range.
($1 = 4.6320 ringgit)
(Reporting by Ashley Fang and Cassandra Yap; Editing by Mrigank Dhaniwala and Subhranshu Sahu)
https://www.nasdaq.com/articles/vegoils-palm-extends-losses-on-soft-demand-rival-oil-weakness