Palm oil falls on cautious trading ahead of output data
07/02/2024 (XM), Kuala Lumpur - Malaysian palm oil futures fell on Wednesday, snapping two consecutive sessions of gains, to trade almost flat, as output data from the world's second-biggest producer's industry regulator is awaited.
The benchmark palm oil contract FCPOc3 for April delivery on the Bursa Malaysia Derivatives Exchange was down 5 ringgit, or 0.13%, at 3,838 ringgit ($805.63) by midday.
The contract traded cautiously flat, balancing expectations of Malaysian Palm Oil Board (MPOB) output data while pending further insights from the World Agricultural Supply and Demand Estimates (WASDE) as well as demand estimates, said Marcello Cultrera, director at commodities consultancy Apricus 8 Pte Ltd.
"While parities have improved at destinations, there are concerns on supply levels moving forward in-line with Southeast Asian weather forecasts," Cultrera said.
Malaysia's palm oil stocks likely fell for three straight months to end-January, in-line with seasonal low production.
Palm oil stocks were seen falling to 2.14 million metric tons in January, down 6.62% from December, according to 10 traders, planters and analysts. Crude palm oil output was seen declining 11.83% from the previous month to 1.37 million tons.
The Malaysian Palm Oil Board will release its monthly data on Feb. 13.
Dalian's most-active soyoil contract DBYcv1 fell 0.79%, while its palm oil contract DCPcv1 lost 0.31%. Soyoil prices on the Chicago Board of Trade BOcv1 declined 0.48%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil edged higher for a third straight day on Wednesday after industry data showed U.S. oil stocks grew less than expected and the U.S. sharply cut its forecast for the country's oil output growth, easing concerns about potential oversupply.O/R
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit MYR=, palm's currency of trade, rose 0.02% against the dollar, making the commodity more expensive for buyers holding the foreign currency.
Palm oil may rise to 3,909 ringgit per metric ton as it has broken resistance at 3,846 ringgit. TECH/C
($1 = 4.7640 ringgit)
Source: Reuters