Key Takeaways
- Malaysian palm oil futures remained unchanged as of midday.
- Higher crude oil prices supported the market but were capped by stockpile concerns.
- September stockpiles are expected to reach an all-time high, surpassing previous peaks.
Malaysian palm oil futures were little changed on Tuesday, with the benchmark contract for December delivery on the Bursa Malaysia Derivatives Exchange gaining 2 ringgit, or 0.04%, to 4,580 ringgit ($1,121.45) a metric ton by midday.
The market was bolstered by firmer crude oil prices and follow-through buying after Monday’s rebound, but concerns over high September stockpiles continued to limit gains, according to David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Malaysia’s palm oil inventories are expected to hit an all-time high in September, topping the December 2018 peak, as production soared to record volumes, outpacing sluggish export demand, a Reuters survey indicated.
Stronger crude oil futures made palm a more attractive option for biodiesel feedstock, with Soyoil prices on the Chicago Board of Trade up 0.03%.
The ringgit, the currency of trade for palm oil, strengthened 0.02% against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.
Indian sunflower oil imports fell in September to their lowest level in more than four years after the Ukraine war disrupted shipments, leading refiners to increase palm oil purchases to their highest level in seven months, according to five dealers.
Palm oil may extend its bounce into a range of 4,656-4,677 ringgit per metric ton, as suggested by its wave pattern and a channel technique, according to Reuters technical analyst Wang Tao.
Despite the market’s current stability, traders remain cautious, with stockpile concerns continuing to influence price movements.
