Palm oil slips as traders take profits while rival vegetable oils firm

what happened

The January contract on Bursa Malaysia Derivatives slid 23 ringgit, or 0.48%, to 4,794 ringgit ($1,175) per tonne by the lunch break, Reuters reported. A Kuala Lumpur trader said prices were pulling back as they hovered near the upper end of the recent band and sellers took profits.

Support came from gains in rival oils: soyoil on Dalian rose 0.27%, Dalian palm added 1.28%, and soyoil on the Chicago Board of Trade gained 0.12%.

Reuters technical analyst Wang Tao said a retreat toward 4,706 to 4,736 ringgit per tonne could follow the failed attempt to clear resistance at 4,834 ringgit. Cargo surveyors estimated Malaysian palm product exports for October 1 to 20 climbed between 58.5% and 78.4% from the prior month.

why it matters

Palm oil competes with other edible oils for a share of global demand, so its prices often track soyoil and other rivals. Firmer crude makes palm more appealing as biodiesel feedstock, which can underpin prices even on days when futures ease. Crude rose more than $1 on Wednesday on Middle East tensions, while falling US crude and product stocks added further support.

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