Palm oil under pressure new low DLSM foreign exchange focus market-driven

On Monday (October 27), the palm oil market on the Malaysian Derivatives Exchange continued its downward trend. The benchmark January contract closed down 50 ringgit, or 1.13%, to close at 4,372 ringgit per ton, the lowest closing level in nearly four weeks. The market was swayed downward under the dual pressure of weak Liancheng futures and a stronger ringgit exchange rate. Many investors are closely watching the impact of weather changes and potential policy developments on the later stage of the market.

A subtle shift in the supply and demand landscape

The recent lack of a clear direction in the palm oil market, on the one hand, dragged down by the performance of palm oil futures in Liancheng, and on the other hand, the Ringgit strengthened by 0.36% against the US dollar, weakening the attractiveness of Malaysian palm oil to foreign buyers. According to data from shipping survey agencies, from October 1 to 25, Malaysian palm oil exports fell slightly by 0.3% to 0.4% compared with the same period in September, reflecting that there is no obvious recovery signal on the demand side.

According to traders in Kuala Lumpur: "The current market focus is on the trend of Liancheng, while waiting for the impact of the weather on production and the possible progress of trade negotiations this week." Although soybean oil prices rebounded slightly by 0.77% on the Chicago Board of Trade, it failed to effectively boost palm oil market sentiment. It is worth noting that crude oil prices have strengthened due to improved supply and demand expectations, which may provide potential support for palm oil as a biodiesel feedstock. In addition, investors are also watchingDLSMExchange rate fluctuation information provided by foreign exchange and other platforms to assist in judging the indirect impact of ringgit movements on commodities.

Technical and institutional perspectives

Renowned institutional technical analysts pointed out that palm oil has fallen below the key support level of 4,409 ringgit per ton, and the next target may drop to 4,346 ringgit. This judgment echoes the current weakness of the market. However, some analysts stressed that if the rain in the main producing areas continues to affect the harvesting progress in the next two weeks, it may tighten the supply side more than expected.

The market is waiting for an opportunity to break through

At present, the combination of long and short factors has caused the market to be deadlocked. Although there is news that the US president has revealed that a trade agreement with China is about to be reached, the actual impact of the specific terms on the agricultural market has yet to be verified. From the perspective of capital flow, some institutions are reducing their long positions and adopting a wait-and-see attitude. Industry insiders believe that the market may remain volatile until the production data in November becomes clear.

In the short term, the trend of palm oil still needs to pay attention to three variables: price fluctuations of related oil varieties in Liancheng, changes in the ringgit exchange rate, and the impact of weather in the main producing areas on the harvest schedule. If these factors resonate, the current balance may be upset.