17/03/2023 (Nasdaq), Jakarta - Malaysian palm oil futures rebounded on Monday, underpinned by data showing a sharp drop in Indonesia's February inventories, and a weaker Malaysian ringgit.

The benchmark palm oil contract FCPOc3 for July delivery on the Bursa Malaysia Derivatives Exchange rose 1.79% to 3,630 ringgit ($822.01) per tonne. It lost 2.40% last week, the first weekly drop in three weeks.

Indonesia, the world's top palm oil producer, had stocks of 2.64 million tonnes at the end of February, down 14.84% from a month earlier.

"Given the sharp decrease in Malaysian palm oil March-end stocks at 1.65 million tonnes, the combined stocks are expected to fall further," Anilkumar Bagani, commodity research head at Sunvin Group, told Reuters.

Malaysia's March palm oil end-stocks fell 21.08% from the previous month to 1.67 million tonnes, data from the Malaysian Palm Oil Board showed last Monday.

The Malaysian ringgit MYR=, palm's currency of trade, weakened 0.36% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.

Dalian's most-active soyoil contract DBYc1 dropped 1.59%, while its palm oil contract DCPc2 eased 0.65%. Soyoil prices on the Chicago Board of Trade BOc2 were trading 0.04% lower.

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 test a resistance zone of 3,729-3,740 ringgit per tonne, a break above which could lead to a gain to 3,797 ringgit, said Reuters technical analyst Wang Tao. TECH/C

($1 = 4.4160 ringgit)

Source: Reuters

https://www.nasdaq.com/articles/vegoils-palm-rebounds-on-low-indonesia-stockpiles