KUALA LUMPUR: Malaysian palm oil futures moved in a tight range on Monday amid weakness in the Chicago soyoil contract and estimated lower January exports in the country.
Palm falls as weakness in rival oils
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 2 ringgit, or 0.05%, to 4,218 ringgit ($964.33) a metric ton in early trade. The contract rose 0.62% in the previous session.
Fundamentals
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Dalian’s most-active soyoil contract rose 0.58%, while its palm oil contract added 1.06%. Soyoil prices on the Chicago Board of Trade were down 1.35%.
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Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. * Cargo surveyors estimate exports of Malaysian palm oil products fell between 18.9% and 24.1% during Jan. 1-25, compared with the same period a month ago.
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Oil prices fell more than 1% on Monday after US President Trump called on OPEC to reduce prices following the announcement of wide-ranging measures to boost US oil and gas output in his first week in office.
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Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
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The ringgit, palm’s currency of trade, strengthened 0.07% against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.
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Indonesia’s November palm oil stocks rose 3.2% from the previous month to 2.58 million tons as slowing exports offset a decline in production, data from Indonesian palm oil association GAPKI showed.
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Palm oil may test resistance at 4,265 ringgit per ton, a break above which could open the way towards 4,315 ringgit to 4,364 ringgit, Reuters technical analyst Wang Tao said.
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