24/10/2023 (Nasdaq), Singapore - Malaysian palm oil futures fell on Tuesday as a rapidly advancing U.S. soybean harvest and a recovering ringgit weighed on prices, though strong demand limited losses.

The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange fell 78 ringgit, or 2.1% to 3,675 ringgit ($769.31) a metric ton at the midday break.

There is an anticipated increase in production and stock levels for October, said Mitesh Saiya, trading manager for Kantilal Laxmichand & Company Mumbai.

Exports of Malaysian palm oil products for Oct. 1-20 were estimated to have risen between 7.9% and 9.9% from a month earlier, data from AmSpec Agri Malaysia and Intertek Testing Services showed.

Rapidly advancing U.S. soybean harvest is likely to boost supplies of the oilseed and its products, including soyoil. Palm oil is affected by price movements in related oils as they compete for a share of the global vegetable oils market.

U.S. farmers had harvested three-quarters of their soybean crop by Sunday, according to weekly data from the U.S. Department of Agriculture (USDA) on Monday. The figures, roughly in line with trade expectations, were ahead of the five-year average pace for each crop.

The appeal of palm oil as a fuel source diminished due to weak crude prices while the weak ringgit and robust export data helped losses, Mitesh added.

Both Brent and U.S. West Texas Intermediate crude futures fell more than 2% on Monday amid the Israel-Hamas war uncertainty. Weaker crude makes palm a less attractive option for biodiesel feedstock.

The Malaysian ringgit MYR=, palm's currency of trade, recovered and strengthened 0.3% against the dollar after hitting record highs in the previous session.

Dalian's most-active soyoil contract DBYcv1fell 1.9%, while its palm oil contract DCPcv1 was down 1.9%.

Soyoil prices on the Chicago Board of Trade BOcv1fell 1.2%, reaching its lowest price in four months.

($1 = 4.7770 ringgit)

Source: Reuters

https://www.nasdaq.com/articles/vegoils-palm-oil-falls-2-on-stronger-soybean-harvest-ringgit-0