FX.co ★ Palm Oil Retreats as Weak Fundamentals Weigh

Malaysian palm oil futures slipped below MYR 4,600 per tonne after recent gains, weighed down by weaker performances in rival edible oils on the Dalian and Chicago exchanges and by lower crude oil prices, which undermined palm oil’s appeal as a biodiesel feedstock. Market sentiment stayed bearish after Malaysian Palm Oil Board data showed that September inventories jumped 24.5% month-on-month to a record 3.51 million tonnes, extending their increase for a sixth consecutive month. At the same time, production rose 16.5% to 2.12 million tonnes, the highest level since August 2015, while exports declined 12.1% to 1.12 million tonnes, registering a second straight monthly fall. Investors were also awaiting China’s inflation and trade figures for fresh clues on demand from this key consuming market. Still, the downside was limited by indications of stronger October shipments, with cargo surveyors estimating that Malaysian palm oil product exports increased by 33.5%–37.7% month-on-month in the October 1–10 period.