Palm climbs to two-week high as El Niño supply fears outweigh stocks

Malaysian palm oil futures erased early losses and reached a two-week peak on Tuesday, with the December contract on Bursa Malaysia Derivatives Exchange closing 0.97% higher at 4,682 ringgit ($1,146.43) a metric ton. Business Recorder reported that traders were weighing expected tightness in supply next year against the large stockpiles held currently. The closing price was the highest since September 24.

Analyst Cheang Kang Wei of Singapore-based StoneX said the market was looking past current inventories toward 2027 supply risks, including El Niño and biodiesel demand under Indonesia's B50 plan. Malaysian palm oil stockpiles jumped to 3.51 million metric tons in September after production reached a record, though the pace of accumulation should start to slow. He said the build-up should moderate by November if exports stay above 1.5 million tons and output holds near 2.0 million tons.

Cargo surveyors estimated gains of between 33.5% and 37.7% in Malaysian palm exports for October 1-10 compared with a month earlier. Crude oil fell as traders weighed supply risks from attacks on Saudi Arabia against the prospect of extra diesel from Russia, and weaker crude makes palm less attractive as biodiesel feedstock. In Dalian, the most-active soyoil contract dropped 0.65% and palm oil there lost 0.77%, while soyoil on the Chicago Board of Trade gained 0.55%.