Palm trades lower on profit booking after 2-session rally

Malaysian palm oil futures dipped on Tuesday as investors booked profit after two sessions of sharp gains on lower palm oil stocks and rising oil prices.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange lost 4 ringgit, or 0.09%, to 4,496 ringgit ($999.11) a metric ton by the midday break.

“The market is currently navigating a critical juncture, with bullish momentum supported by lower palm oil stocks and rising oil prices.

However, concerns over palm oil’s price premium relative to soybean oil are still keeping the market in check,“ said Darren Lim, commodities strategist at Singapore-based brokerage Phillip Nova.

Malaysia’s palm oil stocks declined for a third straight month in December 2024, falling 6.91% to 1.71 million metric tons, while crude palm oil production fell 8.3% and exports plunged 9.97%, data from the Malaysian Palm Oil Board showed.

Cargo surveyors estimated Malaysian palm oil exports to have fallen between 21.4% and 26.8% during the Jan. 1-10 period from a month earlier.

Oil prices eased but remained near four-month highs as the impact of fresh US sanctions on Russian oil remained the market’s key focus. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

China’s soybean oil and meal futures logged their biggest daily rise since 2023 on Monday, while rapeseed meal and palm oil contracts also jumped, following a rally in the Chicago soy complex after the release of US Department of Agriculture’s crop data.

Soyoil prices on the Chicago Board of Trade eased 0.57%. Dalian’s most-active soyoil contract rose 1.51% and its palm oil contract added 0.71%.

Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.

The Malaysian ringgit, palm’s currency of trade, rose 0.18% against the US dollar, making the commodity a tad expensive for buyers holding foreign currencies.

Tags: benchmark contract, soyoil, Malaysia, palm oil, stocks, futures