Palm gains marginally after stocks rise below forecast

KUALA LUMPUR: Malaysian palm oil futures reversed early losses to edge higher on Tuesday, after a key industry data showed inventories rose less than expected.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 2 ringgit, or 0.05%, to 4,260 ringgit ($1,052.63) a metric ton at the close.

The Malaysian Palm Oil Board’s data was market-friendly, with lower-than-expected ending stocks and higher exports than the polls had forecast,“ a Kuala Lumpur-based trader said.

Malaysia’s palm oil stocks climbed to a record high of 3.62 million metric tons in October, surpassing the previous peak set a month earlier, as another month of bumper output more than offset a rebound in exports. However, the figure was lower than expectations of a stock high of 3.75 million tons in a Reuters survey.

Oil prices extended losses from the previous session after US President Donald Trump downplayed the need for additional military action against Iran, easing fears of sustained Middle East supply disruptions, with prospects of oversupply also in focus.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

Dalian’s most-active soyoil contract rose 0.14%, while its palm oil contract gained 0.61%. Soyoil prices on the Chicago Board of Trade were down 0.1%.

Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

The ringgit, palm’s currency of trade, strengthened 0.05% against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.