SINGAPORE: Malaysian palm oil futures flitted in a tight range on Tuesday as traders weighed lower stockpiles against weak exports so far in August.
Malaysian palm oil lower on weak export
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was down 7 ringgit, or 0.19%, at 3,701 ringgit ($831.69) a metric ton, as of 0310 GMT.
Fundamentals
Malaysia's palm oil stocks fell in July for the first time in four months to a four-month low as growth in exports outpaced improved production, the Malaysian Palm Oil Board (MPOB) said on Monday.
Malaysia's palm oil stocks at end-July fell 5.35% to 1.73 million metric tons from the previous month, the lowest MPOB said.
Exports of Malaysian palm oil products during Aug. 1-10 fell between 12.2% and 17.7% from a month earlier, according to data from cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia on Saturday.
Dalian's most-active soyoil contract lost 1.57%, while its palm oil contract was down 1.37%. Soyoil prices on the Chicago Board of Trade dipped 0.4%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices edged lower, breaking a five-day streak of gains, as markets refocused on concerns about demand after OPEC on Monday cut its forecast for demand growth in 2024 due to softer expectations in China.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The Malaysian ringgit, palm's currency of trade, depreciated 0.22% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.
A bullish target range of 3,784 ringgit to 3,789 ringgit per metric ton remains intact for palm oil, as the contract stabilized around strong support zone of 3,671 ringgit to 3,704 ringgit, said Reuters technical analyst Wang Tao.
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