Palm oil headed for a second week of gains on supply concerns and as a weaker Malaysian currency made it cheaper for overseas buyers.
The ringgit was on track for a weekly loss as a renewed spike in domestic COVID-19 cases, which have risen by several hundred every day in recent weeks, and political uncertainty put investors on guard.
Still, the palm oil market remains vulnerable to a sell-off on worries about exports and a decline in soybean oil’s premium over palm oil.
“Palm oil futures are volatile,” said Sathia Varqa, owner of Palm Oil Analytics in Singapore. “There are some bullish factors such as a lower production outlook and tighter stockpiles in the last quarter of 2020.
“However, exports to India will taper off in November after the festival-season buying and palm’s narrowing spread to soybean oil may make the tropical oil less competitive.”
“On the technical front, prices are looking increasingly weak as they failed to sustain above the 3,000 ringgit mark, ” added Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental. He added that the market was heading towards near-term support of M$2,670-M$2,725 (€547-€558).
Popular News Stories
LATEST VIDEOHow sustainable aviation fuel (SAF) is making its way in the aviation sector