Traders remain concerned over weaker export demand for palm oil along with growing stocks. Ahead of a Nov. 12 release of official stocks data, one survey has estimated Malaysian palm stocks at 3 million metric tons, up for the fifth consecutive month to potentially reach the highest level in three years.
Estimates also place October production at the highest level in a year, while it is expected to peak in the month of November, later than seen in recent years.
Wednesday's trade saw the benchmark January contract reach a fresh contract low of 2,105 ringgits, while the January/February and February/March spreads have been in steep downtrends on the spread chart since Aug. 13, a sign of bearish commercial selling.
As seen on the long-term monthly chart, price has fallen 34.4% from the monthly high reached in December 2016, while Wednesday's close is the lowest seen since the month of September 2015. Price has retraced close to 82% of the move from the August 2015 low to the December 2016 high, while looking across the chart, there is little in the way of monthly lows to pose as technical support on the way to a full retracement to the 2015 low of 1,863 ringgits, the country's local currency.
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