JAKARTA: Malaysian palm oil futures inched higher on Wednesday, supported by an uptick in soyoil prices in the Dalian and Chicago markets.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 10 ringgit or 0.21%, to 4,816 ringgit ($1,102.56) a metric ton in early trade.
Palm ends lower on profit taking ahead of a major conference
Fundamentals
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Dalian’s most-active soyoil contract rose 0.44%, while its palm oil contract lost 0.19%. Soyoil prices on the Chicago Board of Trade were up 0.71%.
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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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Malaysia’s palm oil inventories are forecast to fall in October, marking their first decline in three months, due to lower output and higher exports, a Reuters survey showed on Tuesday.
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Palm oil stocks are expected to drop to 1.92 million tons, while crude palm oil output is expected at 1.76 million tons, according to the survey.
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The ringgit, palm’s currency of trade, weakened 0.46% against the US dollar, making the vegetable oil cheaper for buyers holding foreign currencies.
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Oil prices fell on Wednesday as early poll results in the US election showed Democrat Kamala Harris and Republican Donald Trump locked in a tight race for the presidency.
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Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
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Palm oil may retrace further into a range of 4,711 ringgit to 4,741 ringgit per ton, following its failure to break resistance at 4,883 ringgit, according to Reuters technical analyst Wang Tao.
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