Malaysian palm oil continued to weaken on Wednesday as edible oil on the Chicago and Dalian exchanges softened, while high inventories and slow exports further weighed on sentiment.
The October crude palm oil contract on the Bursa Malaysia Derivatives exchange fell for a fifth consecutive session, dropping by a further 1.49% to 4,570 Malaysian ringgit ($1,120.68) per metric ton in midday trade, to hit its lowest since mid-July. Rival soybean oil also eased, with the October contract on the Chicago Board of Trade slipping 0.74% to 66.87 cents per pound.
Malaysian inventories reached a six-month high in August as output rose and exports weakened. Cargo surveyors reportedly estimated Malaysian shipments for the Sept. 1-20 period to have declined by 12.8% to 24.7% from a month earlier, as recent cargo arrivals in top buyers India and China lift domestic stocks and limit purchases.
"Looking ahead, crude palm oil prices are expected to remain firm above 4,700 ringgit/mt in October and likely throughout the rest of the year, underpinned by weather uncertainty and favorable energy markets," the Malaysian Palm Oil Council said, adding that "the main downside risks are an easing in energy prices and further stock accumulation, as palm oil production typically reaches its seasonal peak in September or October."
Meanwhile, the Nymex October ethanol futures contract ended a three-session rally and dipped 0.23% to about $2.19 per gallon on Tuesday. Michigan is considering amending a state law to allow year-round sales of E15, following the signing of E15 Clean-Up Act in California.