Palm oil ticks up in range-bound trading as slowing demand outlook weighs
18/04/2024 (Reuters), Beijing - Malaysian palm oil futures firmed in range-bound trade on Thursday but remained near their lowest level in more than sixweeks, squeezed by expectations of slowing demand after the end of the Eid al-Fitr festive season.
The benchmark palm oil contract FCPOc3 for July delivery on the Bursa Malaysia Derivatives Exchange gained 9 ringgit, or 0.22%, to 4,021 ringgit ($841.92) a metric ton by the midday break, hovering near 3,986 ringgit - its lowest closing level since March 5.
Exports from the world's second largest producer in March had jumped 28.61% on-month to 1.32 million metric tons on higher demand during the Ramadan and Eid al-Fitr festivals. However, traders said demand is expected to ease as the festivities wrap up and amid more attractive pricing against rival vegetable oils.
Meanwhile, aRussian drone attack on Ukraine's Ivano-Frankivsk region targeted critical infrastructure on Thursday, with debris causing fires, the governor said.
Geopolitical tensions and missile attacks on Ukraine on portinfrastructure will create logistical issues, which could trigger bullishness in the vegoils market, said Mitesh Saiya, trading manager at Kantilal Laxmichand & Co.
Dalian's most-active soyoil contract DBYcv1 fell 0.45%, while its palm oil contract DCPcv1 lost 1.1%. Soyoil prices on the Chicago Board of Trade BOcv1 rose 0.5%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
India's oilmeal exports in 2023/24 jumped 13% from a year ago to reach their highest level in a decade as shipments of soymeal more than doubled, a leading industry body said Wednesday.
Oilprices were little changed after a 3% drop in the previous session as the market remains concerned about demand this year and on signs that a wider conflict in the key Middle East producing region could be avoided. O/R
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Palm oil may retest support at 3,969 ringgit per metric ton, possibly breaking it and falling further to the 3,926-3,942 ringgit range, Reuters technical analyst Wang Tao said. TECH/C