Palm Oil Prices Steady as Market Awaits Key Data

Malaysian palm oil futures have been trading in a range-bound manner, reflecting the movements of rival vegetable oils. This trend is particularly notable as the market eagerly anticipates the upcoming data from the Malaysian Palm Oil Board (MPOB) and export figures. On Monday, the benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange saw a slight increase of 1 ringgit, or 0.02%, bringing the price to 4,869 ringgit (approximately $1,116.74) per metric ton during the midday break.

A trader based in Kuala Lumpur commented, “The futures seem to be following Dalian palm oils support. We will establish our lead once the MPOB and export data are out. For the time being, it should be tracking leads from rival oils.” This indicates that traders are closely monitoring the performance of other oils, particularly as they influence palm oil prices.

In the broader market, Dalian’s most-active soyoil contract experienced a rise of 1.43%, while its palm oil contract increased by 0.98%. Additionally, soyoil prices on the Chicago Board of Trade were up by 0.11%. The interdependence of palm oil and other edible oils is crucial, as palm oil competes for market share in the global vegetable oils sector.

Moreover, oil prices have also seen an uptick, gaining more than $1 on Monday. This increase is attributed to OPEC+’s decision to postpone plans to boost output by a month. The market is currently preparing for a significant week that includes a U.S. presidential election and an important meeting in China. The rise in crude oil prices makes palm oil a more appealing option for biodiesel feedstock, further influencing its market dynamics.

In terms of currency, the ringgit, which is the currency used for palm oil trade, strengthened by 0.34% against the U.S. dollar. This appreciation makes palm oil more expensive for buyers who hold foreign currencies, potentially impacting demand.

According to cargo surveyors, exports of Malaysian palm oil products are estimated to have risen between 11.5% and 13.7% in October compared to the previous month. This increase in exports is a positive sign for the industry, indicating robust demand for Malaysian palm oil.

Additionally, Indonesia has raised its crude palm oil reference price for November to $961.97 per metric ton, up from $893.64 in October. This adjustment will result in an export tax of $124 per ton for November, which could further influence market prices.

Looking ahead, technical analysts predict that palm oil prices may surge into the range of 4,936-5,023 ringgit per metric ton, driven by a powerful wave C. This potential increase highlights the volatility and opportunities present in the palm oil market.

The palm oil market is currently navigating a complex landscape influenced by various factors, including rival oils, currency fluctuations, and global economic events. As traders await critical data from the MPOB, the market remains poised for potential shifts. Understanding these dynamics is essential for stakeholders in the palm oil industry, as they can significantly impact pricing and demand in the coming weeks.