Malaysian palm oil futures fell on Monday

Malaysian palm oil futures fell on Monday ahead of the Lunar New Year holidays, which begin on Tuesday, weighed by weak export data in early February and expectations of an accelerated harvest.

Palm oil prices fell after data from cargo appraiser AmSpec Agri Malaysia showed that exports for the period from February 1 to 15 fell by approximately 15% compared to the previous month. A stronger ringgit and profit-taking amid the shortened trading week are also weighing on prices, according to a note from Kenanga Futures. Analysts see support for the May palm oil futures contract at 4,000 ringgit per metric tonne and resistance at 4,080 ringgit per tonne.

The benchmark FCPO1 palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange fell 32 ringgit, or 0.79%, to 4,014 ringgit (US$1,029.76) per metric tonne at the close of trading. The contract had risen 0.22% in the previous session.

Palm oil prices have come under pressure as market participants anticipate an early harvest this month ahead of Ramadan, as well as lower exports, said Anilkumar Bagani, head of commodity research at Sunvin Group, a Mumbai-based brokerage.

“The target markets are largely quiet, with the exception of isolated releases from India,” he said.

According to cargo experts, Malaysian palm oil exports fell by 11.2% to 14.9% month-on-month between February 1 and 15.

The ringgit strengthened 0.18% against the dollar, making the commodity slightly more expensive for buyers holding foreign currency.

Oil prices were little changed as investors assessed the market impact of upcoming US-Iran talks aimed at de-escalating tensions amid an expected supply increase from OPEC+.

Lower oil prices make palm oil a less attractive option for biodiesel production.

The Dalian Commodity Exchange is closed for the Lunar New Year holiday and will resume trading on February 24. The Chicago Mercantile Exchange is also closed for the holiday.

Bursa Malaysia, the derivatives exchange, will be closed on February 17 and 18 due to a public holiday.

Tags: prices, palm oil