VEGOILS-Palm declines on stronger ringgit, cheaper Indonesian cargoes
28.07.2023 (Hellenic Shipping News) - Malaysian palm oil futures fell for a third consecutive session on Thursday, dragged by a firmer ringgit and cheaper Indonesia-origin cargoes, although losses were capped by stronger Dalian soyoil and crude oil.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange finished 35 ringgit, or 0.86% lower at 4,027 ringgit ($891.32), its lowest closing since July 18.
Packer demand was anaemic on competing offers from Indonesia, which were $30-$40 lower than Malaysia-origin cargoes, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Many bull spread traders were unwinding their positions on Thursday, with the July contract about to expire. Free-on-board bids were far apart, though sellers were again reluctant, he added.
The Malaysian ringgit MYR=, palm’s currency of trade, appreciated 0.64% against the dollar. A stronger ringgit makes palm oil less attractive for foreign currency holders.
Dalian’s most-active soyoil contract DBYcv1 edged up 0.91%, while its palm oil contract DCPcv1was flat. Soyoil prices on the Chicago Board of Trade BOcv1were also steady.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysia’s palm oil exports during July 1-25 rose 10.8% from the month before, according to AmSpec Agri Malaysia.
Data from cargo surveyor Intertek Testing Services on Tuesday showed a 17.8% rise in exports for the same period.
Oil climbed almost 1% on Thursday, recouping losses from the previous session, supported by supply tightness owing to OPEC+ production cuts and renewed optimism on the outlook for Chinese demand and global growth.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil may fall further to 3,978 ringgit per metric ton, driven by a wave c, said Reuters technical analyst Wang Tao.
Source: Reuters (Reporting by Carman Chew; Editing by Varun H K)