VEGOILS-Palm gains on shrinking March inventory estimates
06.04.2023 (Nasdaq) - KUALA LUMPUR, April 6 (Reuters) - Malaysian palm oil futures firmed on Thursday, recouping some ground lost in the previous session, as expectations of a sharp drop in March stockpiles underpinned prices.
The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange gained 26 ringgit, or 0.67%, to 3,894 ringgit ($885.00) a tonne by the midday break.
Malaysia's palm oil inventories at March-end were seen tumbling 16.3% from the month before to 1.77 million tonnes, its smallest level in eight months, as exports soared ahead of the month of Ramadan, a Reuters survey showed on Wednesday.
"Demand from India and China is still lacking and Ukrainian sunflower oil has captured the market share," said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.
Argentina's third plan to increase its foreign currency reserves by boosting soybean exports, to be announced on Wednesday, will take effect on Saturday until May 24, a government source said.
The "soy dollar" plans, launched in the second half of 2022, aim to increase sales and exports of soybeans and its by-products by offering producers an exchange rate higher than the official rate of 210 pesos per dollar.
This is putting more pressure on the market, Saiya said.
"The palm market does not look bullish in the near term, as Indonesia is expected to be aggressive in selling after Ramadan due to the current low exports."
Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.3%, its third consecutive daily loss. Dalian's most-active soyoil contract DBYcv1 gained 0.6%, while its palm oil contract DCPcv1 rose 0.5%.
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 retest a support at 3,853 ringgit per tonne, a break below which could open the way towards 3,797 ringgit, Reuters technical analyst Wang Tao said. TECH/C
(Reporting by Mei Mei Chu; Editing by Subhranshu Sahu and Uttaresh Venkateshwaran)
((Meifong.chu@thomsonreuters.com))
https://www.nasdaq.com/articles/vegoils-palm-gains-on-shrinking-march-inventory-estimates