Palm oil slips over 1% as weaker rivals, higher Oct supply outlook weigh

November 9, 2021: Malaysian palm oil futures fell on Tuesday, tracking weakness in rival oils, while expectations of a larger rise in October stockpile also weighed on sentiment.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange slid 92 ringgit, or 1.88%, to 4,803 ringgit ($1,155.12) a tonne during early trade, down for a second session in the last three.

FUNDAMENTALS

* A higher-than-expected forecast of 1.7% rise in October production by the Malaysian Palm Oil Association on Monday have stoked concerns that inventories may rise faster than previously estimated.

* The Malaysian Palm Oil Board is scheduled to release official data on Wednesday.

* Refinitiv Agriculture Research said in a note on Monday the contract may fall towards support levels of 4,765-4,785 ringgit a tonne this week, with resistance at 5,220 ringgit a tonne, weighed down by erosions in broader external markets.

* However, the market's downside could be limited by adverse weather patterns amid the monsoon season across Malaysia and Indonesia, potentially curbing palm oil production, Refinitiv said.

* Dalian's most-active soyoil contract fell 1.2%, while its palm oil contract slipped 1%. Soyoil prices on the Chicago Board of Trade were down 0.14%.

* Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Reuters