05/04/2023 (Nasdaq), Kuala Lumpur - Malaysian palm oil futures slipped on Wednesday after touching a near three-week high the previous day, although a forecast of shrinking stockpiles limited the losses.

The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange slid 56 ringgit, or 1.41%, to 3,910 ringgit ($889.85) a tonne by the midday break. The contract had risen 5.45% in the last two sessions.

Palm prices are expected to recover, supported by positive fundamentals and external markets, Refinitiv Commodities Research said in a note.

"Earlier, heavy rains and floods in Malaysia had resulted in weaker output, while Indonesia's export restrictions prompted buyers to turn towards the Malaysian palm oil supply," it said.

A Reuters survey forecast Malaysian stockpiles at end-March to plunge 16.3% from the month before to 1.77 million tonnes, its lowest since July.

Production rose nearly 2% to 1.28 million tonnes, while exports jumped 25% to 1.39 million tonnes, according to a survey published ahead of Malaysian Palm Oil Board data due next week.

Meanwhile, the ringgit MYR=, palm's currency of trade, rose 0.23% against the dollar, making the commodity more expensive for holders of foreign currency.

Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.2%. The Dalian exchange was closed for a public holiday.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Palm oil may fall to 3,853 ringgit per tonne, following its failure to break a resistance at 3,963 ringgit, Reuters technical analyst Wang Tao said.

($1 = 4.3940 ringgit)

Source: Reuters

https://www.nasdaq.com/articles/vegoils-palm-falls-after-recent-gains-lower-stockpiles-limit-losses