PALM OIL FUTURES MAY TREND UP TOWARDS RM3,840-3,860/MT FOR WEEK OF DEC 11

11 декабря 202311 дек 2023

1 мин

PALM OIL FUTURES MAY TREND UP TOWARDS RM3,840-3,860/MT FOR WEEK OF DEC 11 LSEG Agriculture Research believes Malaysian Crude Palm Oil Futures (FCPO) for the third-month benchmark contract may retest the resistance levels of RM3,840-3,860/mt (metric tonnes) this week, with support at RM3,690-3,700/mt. Bullish drivers The palm oil market reversed from a losing streak late last week, tracking gains in palm olein futures on the China Dalian Commodity Exchange and US soybean oil futures. On fundamentals, the latest Reuters survey showed Malaysian palm oil stocks were expected to decline to 2.44 million mt at the end of November, down 0.5% from October, due to a seasonal decrease in output and higher exports. Palm oil production was estimated to reduce by 6.6% to 1.81 million mt month-on-month. A miller association’s data showed palm oil production in southern Peninsular Malaysia dropping by 7.5% during Dec 1-5 versus Nov 1-5. Last week, Indonesia's Biodiesel Producers' Association announced

LSEG Agriculture Research believes Malaysian Crude Palm Oil Futures (FCPO) for the third-month benchmark contract may retest the resistance levels of RM3,840-3,860/mt (metric tonnes) this week, with support at RM3,690-3,700/mt.

Bullish drivers

The palm oil market reversed from a losing streak late last week, tracking gains in palm olein futures on the China Dalian Commodity Exchange and US soybean oil futures.

On fundamentals, the latest Reuters survey showed Malaysian palm oil stocks were expected to decline to 2.44 million mt at the end of November, down 0.5% from October, due to a seasonal decrease in output and higher exports. Palm oil production was estimated to reduce by 6.6% to 1.81 million mt month-on-month.

A miller association’s data showed palm oil production in southern Peninsular Malaysia dropping by 7.5% during Dec 1-5 versus Nov 1-5.

Last week, Indonesia's Biodiesel Producers' Association announced that 13.41 million kilolitres of biodiesel will be allocated for mandatory palm oil-based blending in 2024, slightly more than this year's allocation. In February, the country raised the mandatory palm oil blend for the fuel from 30% to 35%, resulting in an allocation of 13.15 million kilolitres of biodiesel for the current year

Over the next 10 days, the weather forecast for Indonesia expects wet spells in north Sumatra. Malaysia is expected to experience relatively drier weather conditions except for parts of Peninsular Malaysia. Otherwise, the weather is expected to be favourable for palm areas.

Bearish drivers

Cargo surveyor ITS showed Malaysian palm oil exports declined by 7.4% during the first day of December versus the same period last month.

Crude oil prices plunged to multi-month lows last week due to concerns about weak energy demand in the U.S. and China, alongside record-high U.S. output. With weak oil prices, discretionary palm oil-based biodiesel blending remains unappealing.

Over in the Americas, Brazil and Argentina, two major exporters of soybeans and corn, have recently received some much-needed rain. This rain has come as a relief to farmers who had been struggling with drought and high temperatures, both of which had negatively impacted crop yields.