KUALA LUMPUR: Malaysian palm oil futures fell for a fourth day on Thursday, as traders shifted their focus to the upcoming palm oil board data after a highly-anticipated conference in Kuala Lumpur did not indicate a clear price trend.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange slid 16 ringgit, or 0.38%, to 4,164 ringgit ($921.24) a tonne by the midday break.
Weaker Dalian and crude oil are putting some pressure on the market but downside will be limited by a weak ringgit and expectation of a sharper drop in February palm inventories, a Kuala Lumpur-based trader said.
The Malaysian Palm Oil Board (MPOB) is scheduled to release its February supply and demand data on Friday.
Indonesia’s biodiesel policy and the likely emergence of the El Nino weather pattern could further strain global inventories of palm oil, lifting prices later this year, leading industry officials and analysts said at a conference on Wednesday.
Malaysian palm oil is expected to trade between 4,000 and 5,000 ringgit ($1,106) per tonne from now until August as Indonesia’s ambitious biodiesel mandate will keep stocks tight in the first half of 2023, analyst Dorab Mistry said at the conference.
Analyst James Fry said the contract will trade at 3,350 ringgit by the end-year, pressured by lower gasoil prices.
Analyst Thomas Mielke forecast Malaysian production in 2023 to rise by 600,000 tonnes to 19 million tonnes, while Indonesian production is seen rising by 1.2 million tonnes to 47.7 million tonnes.
Palm oil finishes lower for third day on weaker rival oils
The market is still digesting the analysts forecast from the conference, the trader said.
Dalian’s most-active soyoil contract fell 0.5%, while its palm oil contract also slipped 0.8%.
Soyoil prices on the Chicago Board of Trade gained 0.4%.
Palm oil looks neutral in a range of 4,153-4,225 ringgit per tonne, and an escape could suggest the following direction, Reuters technical analyst Wang Tao said.
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