Palm oil falls on heavy losses at Dalian rival oils
13/11/2024 (Reuters), Jakarta - Malaysian palm oil futures fell for a second session in a row on Wednesday, dragged down by the heavy losses in prices of rival vegetable oils in Dalian.
The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange lost 114 ringgit, or 2.27%, to 4,912 ringgit ($1,103.57) a metric ton by the midday break.
"Prices have sharply declined below the 5,000 ringgit level, exacerbated by weakness in the Chinese-related vegetable oils market. This suggests a consolidation following the recent bull run from Sept. 18 to Nov. 11," said Darren Lim, commodities strategist at Singapore-based brokerage Phillip Nova.
Dalian's most-active soyoil contract DBYcv1 plunged 4.67%, while its palm oil contract DCPcv1 tumbled 4.71%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 1.36%.
Palm oil tracks the pricemovements of rival edible oils as it competes for a share in the global vegetable oils market.
Chicago soybean futures took a sharp dive on Tuesday as traders worried that U.S. President-elect Donald Trump's nominee for the head of the U.S. Environmental Protection Agency would take a less-than-friendly view of the biofuel industry, analysts said. GRA
Exports of Malaysian palm oil products in the Nov. 1-10 period are estimated to have dropped between 14.6% and 15.8% from the same period a month ago, according to surveyors AmSpec Agri Malaysia and Intertek Testing Services (ITS).
Malaysia's palm oil inventory shrank the most in seven months in October as exports surged, production fell and domestic consumption increased, the country's industry regulator said on Monday.
Oil prices edged up on the day on signs of near-term supply tightness but remained near their lowest in two weeks, a day after OPEC downgraded its forecast for global oil demand growth in 2024 and 2025. O/R
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Palm oil maybreak support at 5,017 ringgit and fall into the 4,882-4,947 range. The current correction is expected to consist of three waves, according to Reuters' market analyst for commodities and energy technicals Wang Tao. TECH/C