Palm oil surrenders most of early gains on India budget caution
23/07/2024 (Reuters), Beijing - Malaysian palm oil futures gave up most of their early gains on Tuesday, as concerns surrounding India's annual budget outweighed support from strong July exports.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange gained 2 ringgit, or 0.05%, to 3,987 ringgit ($853.38) a metric ton by the midday break, hovering near its highest since July 5.
If the market closes higher for a sixth consecutive session, it would be the market's longest rally since January.
The market is trading on a cautious note ahead of India's budget, where the government is expected to revise import duties on vegetable oils, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Exports of Malaysian palm oil products for July 1-20 jumped between 39.2% and 41.4% from the same period in June, cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia said on Saturday.
Top producer Indonesia launched a trial of palm oil-based biodiesel, known as B40, on a train on Monday, news outlet CNN Indonesia quoted an energy ministry official as saying.
LSEG Agriculture Research said the benchmark palm oil futures contract may trend up towards the resistance levels of 4,000-4,020 ringgit per metric ton this week, with support at 3,840-3,860 ringgit.
Oil prices steadied on Tuesday after falling for the past two sessions, as investors remained cautious amid expectations of plentiful supplies and weak demand, while brushing off the U.S. presidential campaign upheaval. O/R
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.Dalian's most-active soyoil contract DBYcv1 gained 1%, while its palm oil contract DCPcv1 rose 0.7%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.02%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.