FX.co ★ Palm Oil Slides After Monthly Data

Malaysian palm oil futures experienced a downturn on Wednesday, settling below MYR 4,100 per tonne following a modest gain in the previous session. The decline was attributed to the latest figures from the Malaysian Palm Oil Board (MPOB), which revealed a significant increase in end-November stocks, rising 13.0% from the previous month to reach 2.84 million tonnes. This stockpile represents the highest level in six and a half years, surpassing Reuters' projection of 2.66 million tonnes. In addition, the performance of rival soyoil on the Chicago markets added to the market's cautious sentiment. Reports have surfaced that Argentina might reduce export taxes on grains, such as soybeans and corn, potentially heightening competitive pressure. However, the downside was partially mitigated by the depreciation of the ringgit and positive expectations for seasonal demand leading up to Lunar New Year and Ramadan. The MPOB data also highlighted a 5.3% decrease in palm oil production, dropping to 1.94 million tonnes in November, while exports saw a significant decline of 28.1%, landing at 1.21 million tonnes. Furthermore, new statistics from major buyer China indicated that consumer inflation reached a 21-month peak in November, even though producer prices maintained their prolonged downtrend.