Palm oil dips tracking weak rival edible oils, stronger ringgit
04/03/2024 (XM), Singapore - Malaysian palm oil futures dropped on Monday, tracking weakness in rival edible oils and a stronger ringgit.
Traders maintained a cautious stance and looked ahead to cues from an industry conference that started earlier in the day.
The benchmark palm oil contract FCPOc3 for May delivery on the Bursa Malaysia Derivatives Exchange fell 8 ringgit, or 0.2% to 3,958 ringgit ($837.49) a metric ton by midday break.
The 35th Palm & Lauric Oils Price Outlook Conference & Exhibition is taking place in Kuala Lumpur during March 4-6. Traders are awaiting cues on rival soyoil, global supply-demand, price outlook of palm oil, and potential challenges of the Malaysian palm oil industry.
Dalian's most-active soyoil contract DBYcv1 fell 0.14%, while its palm oil contract DCPcv1 lost 0.37%. Soyoil prices on the Chicago Board of Trade BOcv1 were largely unchanged.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
An agribusiness consultancy on Friday raised the forecast for Brazil's 2023/2024 soybean crop, while another cut its projection, indicating how different methodologies and unpredictable weather events have made it difficult to estimate soybean output.
The Malaysian ringgit MYR=, palm's currency of trade, strengthened 0.36% against the dollar, logging a one-month high. FRX/
A stronger ringgit makes palm oil less attractive for foreign currency holders.
Market participants will pay close attention to any policy signals from an annual meeting of China's parliament beginning on Tuesday where it is expected to unveil moderate stimulus plans to stabilise growth. China is the second largest palm oil buyer after India.
Palm oil may retest resistance at 3,992 ringgit per metric ton, a break above could lead to a gain to 4,022 ringgit, said Reuters technical analyst Wang Tao. TECH/C
($1 = 4.7260 ringgit)
Source: Reuters