Palm Oil Rebounds as Bargain Hunting Offsets Weak Exports

Malaysian palm oil futures rallied, hovering near MYR 4,350 per tonne and snapping recent losses as bargain hunting emerged after prices hit their lowest level since early March. Strength in rival edible oils and firmer crude oil prices also boosted risk appetite. Meanwhile, seasonal production declines are expected as palm trees enter their low-yield period from November, with potential El Niño effects posing an additional supply risk. Indonesia's push for higher biodiesel mandates is also projected to absorb substantial volumes, providing medium-to-long-term price support. However, gains were capped by signs of weaker exports, with Intertek Testing Services reporting a 1.9% mom drop in palm oil shipments during the November 1-10 period, following October's surge. Meanwhile, monthly data from the Malaysian Palm Oil Board showed inventories hit a fresh record of 3.62 million tonnes in October, marking a seventh consecutive monthly increase, while production rose for a fifth month.

Malaysian palm oil futures extended their decline, falling below MYR 4,150 per tonne to their lowest level since March, as traders digested October data from the Malaysian Palm Oil Board (MPOB). Inventories surged to a new record 3.62 million tonnes, marking a seventh monthly increase, while production rose for a fifth month, gaining 1.74% mom to 2.15 million tonnes. Further pressure came from weaker crude oil prices, which reduced palm oil's appeal as a biodiesel feedstock, after U.S. President Trump signaled that further military strikes on Iran were unlikely. Regional competition also mounted as Indonesia cut its November CPO reference price by over 6% and slashed its export levy, making its supplies more competitive. Still, losses were limited by MPOB data showing a 55.8% monthly rebound in exports to 1.71 million tonnes, the highest in a year. The recovery coincided with stronger demand from India, where palm oil imports hit a 14-month high in October ahead of the Diwali festival.

Malaysian palm oil futures extended their decline, hovering below MYR 4,350 per tonne at their lowest level since March. Prices are poised for their deepest weekly drop in almost two years, pressured by plunging rival edible oil prices and record-high inventories. A sharp weekly drop in crude oil prices also weighed on sentiment, reducing palm oil's appeal as a biodiesel feedstock amid easing concerns over Middle East supply disruptions. Meanwhile, regional competition intensified as top supplier Indonesia cut its Nov. crude palm oil reference price by over 6% and lowered its export levy, making its supplies more competitive. Uncertainty over potential changes to Malaysia's CPO export tax further dampened sentiment. Still, the downside was partly cushioned by solid exports, with Oct. shipments surging 45.4%–73.5% from Sept. Palm oil imports by key buyer India also climbed to a 14-month high ahead of Diwali. Markets will be closed Monday for a public holiday.