Palm oil prices closed Wednesday’s trading virtually unchanged

Palm oil prices closed virtually unchanged amid mixed signals. While higher soybean oil prices and bargain hunting after the recent decline likely provided some support, weak export data limited upside potential, Kenanga Futures said in a note. Weak demand increases the risk of inventory drawdowns, while a strong Malaysian ringgit continues to dampen foreign buyer interest, the company added. The brokerage set support and resistance levels for palm oil at 4,020 and 4,145 ringgit per tonne, respectively.

Malaysian palm oil futures fell slightly on Wednesday, marking their fourth consecutive session of declines, following weakening prices for Chicago soybean oil and Dalian palm olein oil.

The benchmark FCPO1 palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange fell 1 ringgit, or 0.02%, to 4,052 ringgit (US$1,042.45) per metric ton at the close of trading.

“Palm oil contracts are largely following strengthening overseas markets and some bargain-basement buying, given recent price declines,” said a Kuala Lumpur-based trader.

The most actively traded Dalian soybean oil contract rose 0.96%, while the palm oil contract fell 0.16%. Soybean oil prices on the Chicago Mercantile Exchange fell 0.46%.

Palm oil prices are tracking the price movements of competing edible oils as it competes for market share in the global vegetable oil market.

According to independent inspection company AmSpec Agri Malaysia, Malaysian palm oil exports fell 16.1% year-on-year between February 1 and 25, while Intertek Testing Services reported a 12.1% decline.

The ringgit strengthened slightly by 0.08%, making the commodity more expensive for buyers with foreign currency.

On Wednesday, Chicago soybean prices reached a new three-month high, boosted by optimism about Chinese demand, while comments from Beijing eased some concerns about US tariff policy.

Oil prices rose slightly on Wednesday, as investors weighed the threat of a military conflict between the US and Iran that could disrupt supplies, as well as a significant increase in US crude inventories.

Higher oil futures prices make palm oil a more attractive feedstock option for biodiesel production.

Tags: prices, palm oil