Palm falls, tracks Chicago soyoil lower

On Monday, Malaysian palm oil futures slipped as they lagged behind Chicago soyoil and were buoyed by rising stockpiles, according to market reports. The January delivery price for the benchmark palm oil contract on Bursa Malaysia Derivatives Exchange fell marginally to 4,766 ringgit ($1,168.14) per metric ton. A trader in Kuala Lumpur explained that cautious trading ensued due to the mixed performance of Dalian palm olein and Chicago soybean oil futures.

However, upside potential remained restrained by Malaysia's excessive palm oil inventories, he added. The trading of Dalian's most popular soyoil fell by 0.4%, while its palm oil contract gained 0.58%. Prices of soyoil on the Chicago Board of Trade also dipped by 0.09%. The decline in palm oil can be attributed to market speculation that Malaysia might waive export taxes on crude palm oil to stimulate shipments and lower its high stockpiles.

In September, Malaysia's agricultural exports saw a 5.7% decrease, primarily due to falling shipments of palm oil and palm oil-based products, as per government data. Processing of fresh fruit bunches at palm oil mills in Indonesia's West Kalimantan province slowed down in September because of reduced river levels, which hampered transportation.

Oil prices fell on Monday following US President Donald Trump's waiver of sanctions and tariffs on Russia, potentially leading to increased exports of Russian fuel. This development made palm oil a less appealing choice for biodiesel feedstock. Analyst Wang Tao from Reuters forecasted that palm oil could maneuver into a price range of 4,799 to 4,820 ringgit per metric ton, as it has broken the resistance level of 4,766 ringgit.