Palm oil rises ahead of Malaysia's supply-demand report
09/10/2024 (Reuters), Kuala Lumpur - Malaysian palm oil futures inched higher on Wednesday, reversing earlier losses, as market participants awaited a key official domestic supply and demand data for further direction.
The benchmark palm oil contract FCPOc3 for December delivery on the Bursa Malaysia Derivatives Exchange was up 18 ringgit or 0.42%, to 4,289 ringgit ($1,001.63) a metric ton at the midday break.
The contract fell as much as 1.80% earlier in the session, pressured by weaker Dalian edible oils and a stronger ringgit.
Malaysian palm oil futures rallied on anticipation of weak output growth and low stock levels in the country ahead of MPOB's key crop report, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
The Malaysian Palm Oil Board (MPOB) is due to release the supply-demand data for September on Thursday.
Dalian's most-active soyoil contract DBYcv1 fell 0.77%, while its palm oil contract DCPcv1 lost 1.4%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 1.04%.
Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
The ringgit MYR=, palm's currency of trade, strengthened 0.07% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Oil prices steadied in Asian trading as traders weighed developments in the Middle East conflict against continued bearish expectations for demand. O/R
Brent crude futures LCOc1 were up around 0.8% at 0535 GMT. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Implementation of higher biodiesel mandates in Indonesia, the world's biggest palm oil producer, is likely to tighten supplies of the vegetable oil, a leading industry analyst said.
Companies that have paid to source agricultural produce that complies with the European Union's anti-deforestation law would lose out if the EU decides to delay implementing the legislation by a year, industry groups and traders said.
Palm oil may extend loss into a range of 4,119 ringgit to 4,152 ringgit per ton, as an uptrend from the Sept. 30 low of 3,987 ringgit has reversed, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.2820 ringgit)