JAKARTA: Malaysian palm oil futures opened lower on Tuesday after four consecutive sessions of gains, weighed down by weaker Dalian soyoil prices and a stronger ringgit.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange lost 23 ringgit, or 0.47%, to 4,868 ringgit ($1,115.23) a metric ton in early trade.
Fundamentals
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Dalian’s most-active soyoil contract fell 0.18%, while its palm oil contract gained 0.35%. Soyoil prices on the Chicago Board of Trade were up 0.24%.
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Palm oil tracks price movements of rival edible oils as it competes for a share in the global vegetable oils market.
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The ringgit, palm’s currency of trade, strengthened 0.11% against the US dollar, making the vegetable oil more expensive for buyers holding foreign currencies
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Oil prices eased as markets braced for uncertainties from the US presidential election, after rising more than 2% in the past session as OPEC+ delayed plans to hike production in December and eased supply concerns.
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Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
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Estimates by cargo surveyors showed exports of Malaysian palm oil products rose between 11.5% and 13.7% in October, compared with a month earlier.
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Indonesia raised its crude palm oil reference price for November to $961.97 per metric ton from $893.64 in October, a trade ministry official told Reuters. The new price will put the export tax for November at $124 per ton.
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Palm oil may retrace into a range of 4,747 ringgit to 4,791 ringgit per metric ton, following its failure to break resistance at 4,883 ringgit, according to Reuters’ technical analyst Wang Tao.
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