Palm Oil Rises Further on Bargain Hunting, Softer Stock Build

Malaysian palm oil futures extended gains to trade near MYR 4,450 per tonne, supported by a weaker ringgit and firmer rival edible oils on the Dalian markets. Prices moved further away from their lowest level since early March, as bargain hunting persisted following a smaller-than-expected stock build. October inventories rose to a record 3.62 million metric tons, but below market estimates of 3.75 million tons. In top grower Indonesia, exports of palm oil products hit 33.8 million tons in January–October, up 6% yoy. Meanwhile, seasonal production declines are expected in Southeast Asia, as palm trees enter their low-yield period from November, with potential El Niño effects posing an additional supply risk. However, gains were limited by signs of softer demand in November, as cargo surveyors noted shipments fell 1.9–2.3% in the first ten days of the month from October. Meanwhile, Malaysian Palm Oil Board monthly data showed production rose for a fifth straight month in October.

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.