Palm oil is ahead of Malaysian supply-demand reports
Malaysian palm futures declined on Wednesday, reversing gains made earlier, as participants in the market awaited official data about domestic demand and supply.
At the close, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange was down 20 Ringgit or 0.47% to 4,251 Ringgit ($993.22) per metric ton.
The contract rose by as much as 0.73 % in the afternoon session.
Malaysian palm futures rose on the expectation of weak production growth and low stocks in the country, according to David Ng, a proprietary trading at Kuala Lumpur based trading firm Iceberg X Sdn. Bhd.
On Thursday, the MPOB will release its September supply-demand statistics.
Dalian's palm oil contract, which is the most active contract, fell by 2.05%. Chicago Board of Trade soyoil prices were up by 0.49%.
As rival edible oils compete to gain a share of global vegetable oil market, palm oil monitors the price movement of their competitors.
Palm's trade currency, the ringgit, has strengthened by 0.12% against the US dollar, increasing the price of the commodity for buyers who hold foreign currencies.
The oil prices lost their early gains Wednesday due to a combination of weak fundamentals in demand and rising supplies, which countered the risk of disruption in supply from the conflict in the Middle East as well as Hurricane Milton in the United States.
Brent crude futures fell 0.16% to 1049 GMT. Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
A leading industry analyst has said that the implementation of higher biodiesel requirements in Indonesia, which is the world's largest palm oil producer will likely lead to a tightening of supplies of vegetable oil.
Industry groups and traders have said that companies that paid to source agricultural products that comply with the European Union’s anti-deforestation legislation would lose out if it decides to defer the implementation of the law by an year.
(source: Reuters)
