Key Takeaways
- Malaysian palm oil futures ended flat on Tuesday.
- Traders await demand and supply data from the Malaysian Palm Oil Board.
- Persistent El Nino weather concerns and stronger soybean oil prices supported the market.
Malaysian palm oil futures remained unchanged on Tuesday, as traders awaited crucial data from the Malaysian Palm Oil Board (MPOB) expected to be released on Thursday.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed at 4,977 ringgit ($1,226.77) a metric ton, down 1 ringgit or 0.02% from the previous session.
David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd, attributed the market's higher trading to persistent El Nino weather concerns and the strength of soybean oil prices.
The Malaysian palm oil market is closely tied to its rivals in the global vegetable oils market, with soybean oil prices rising 0.51% and palm oil contracts increasing by 1.37% in Dalian.
Global oil prices have surged to multi-week highs following attacks on Saudi energy facilities by Iran-backed Houthis and threats of economic warfare from Tehran, making palm oil a more attractive option for biodiesel feedstock.
The ringgit, the currency of trade for palm oil, weakened 0.32% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
India's aggressive vegetable-oil buying has led to congestion at major ports, causing delays in vessel unloading by up to 10 days as shore tanks fill and refiners struggle to clear incoming cargo, according to industry officials.
The Malaysian Palm Oil Board is expected to release its August demand and supply data, which will provide key insights into the market's direction.
The market traded higher due to persistent El Nino weather concerns combined with strength in soybean oil.
David Ng, Proprietary trader at Iceberg X Sdn Bhd
