Malaysian palm oil futures posted their first weekly decline in five weeks

Malaysian palm oil futures posted their first weekly decline in five weeks, fueled by weakness in competing vegetable oils in the Chicago and Dalian markets.

Palm oil prices declined, fueled by a weaker soybean oil market in Chicago, according to David Ng, a Kuala Lumpur-based trader at Iceberg X. He added that the market also anticipates weaker demand going forward. He forecasts support above MYR4,050 per tonne and resistance at MYR4,300.

The benchmark FCPO palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange lost MYR53, or 1.26%, to MYR4,153 (US$1,052.72) per metric tonne. For the week, the contract has lost 1.8%.

“Palm oil futures on Bursa Malaysia traded lower after spreads adjusted against rival oilseeds. Market participants adopted a cautious stance ahead of the Malaysian Palm Oil Conference in Kuala Lumpur next week,” said a Kuala Lumpur-based trader.

The most active Dalian soybean oil contract, DBYcv1, fell 0.44%, while the palm oil contract lost 1.02%. Chicago Mercantile Exchange soybean oil prices fell 0.55%.

Palm oil prices follow the price movements of rival edible oils as it battles for share in the global vegetable oil market.

According to a Reuters poll, Malaysian palm oil inventories are expected to end a ten-month streak of gains in January as exports surged during a seasonal production slowdown.

According to Reuters technical analyst Wang Tao, the price of FCPOc3 palm oil could retest the support level of 4,169 ringgit per metric tonne; a break below this level could open the way to the 4,116-4,148 ringgit range.

Tags: palm oil, prices