Behind the scramble for the 4,150 ringgit mark, is the long-short logic of palm oil quietly changing?

On Monday (November 17), the main palm oil contract of Bursa Malaysia Derivatives Exchange closed slightly higher in light trading, maintaining an upward trend for the third consecutive trading day. As of the close, the January contract rose by 6 ringgit, or 0.14%, to close at 4,151 ringgit per ton. Despite weak export data, supply concerns from Indonesia's policy changes and a weaker ringgit supported market sentiment.

Multiple factors cn.xmfx.mepeting

The market on that day showed a pattern of intertwined long and short factors. Data from shipping survey agencies show that Malaysian palm oil product exports fell by 10%-15.5% from November 1 to 15 cn.xmfx.mepared with the same period last month, reflecting short-term weakness in spot demand. Meanwhile, a fall in crude oil prices has dented the appeal of palm oil as a feedstock for biodiesel, and the Russian port of Novorossiysk resumed shipments after a two-day suspension following an attack, easing supply concerns in energy markets.

However, the negative factors were offset by two major supports. The ringgit fell 0.44% against the U.S. dollar on the day, making U.S. dollar-denominated palm oil more price cn.xmfx.mepetitive for overseas buyers. More importantly, the policy signals released at the Indonesian Palm Oil Conference last week continued to ferment, and industry analysts' concerns about the supply outlook injected bullish sentiment into the market.

Indonesia’s policy variables have become the focus

Analysts from well-known institutions pointed out at the Indonesian Palm Oil Conference that the uncertainty of land acquisition policies and the advancement of biodiesel plans may drive up palm oil prices in the cn.xmfx.meing months. As the world's largest producer, Indonesia's policy trends have always had a decisive impact on the global supply pattern.

A Kuala Lumpur trader said: "The optimistic expectations at the meeting are still supporting the market. Despite poor export data, investors are more concerned about medium- and long-term supply risks." This change in sentiment is reflected in price trends. Although soybean oil futures on the Dalian cn.xmfx.memodity Exchange fell 0.14% that day, palm oil futures still bucked the trend and rose 0.18%, showing that funds are more inclined to focus on the fundamental story of palm oil itself.

Cross-market linkage effect

In related markets, the price of soybean oil on the Chicago Board of Trade rose slightly by 0.28%, forming a linkage with palm oil. This synchronized trend highlights the overall characteristics of the global vegetable oil market, with various varieties maintaining price correlations through cn.xmfx.mepetition for market share.

It is worth noting that the current market is in a critical period of transition from the traditional peak demand season to the off-season. The month-on-month decline in export data is in line with seasonal patterns, but whether the year-on-year decline will expand will become the focus of subsequent attention. Historically, inventory levels at the end of the year often determine the price direction in the first quarter of the next year.

Undercurrents in capital deployment

From the perspective of changes in positions, although the price increase is limited, the steady increase in open positions suggests that new funds are being deployed. Market participants appear to be preparing for potential policy-driven developments, and are particularly wary of Indonesia's possible mandatory biodiesel blending increase.

Analysts pointed out that if Indonesia further increases the blending ratio of biodiesel from the current B35 to B40, it will increase the consumption of palm oil by nearly one million tons per year, which is enough to change the global supply and demand balance sheet. At the same time, tighter land policies may lead to a decrease in the willingness of small farmers to plant, thus affecting mid- to long-term yield potential.

Outlook

In the short term, the market will focus on the Malaysian Palm Oil Board’s monthly data to verify the supply situation, as well as the specific implementation timetable of Indonesian policies. Technically, the 4,150 ringgit mark has become a key price for both bulls and bears. Whether it breaks through or not will determine the next direction.

From a more macro perspective, the global vegetable oil market is undergoing structural adjustment. Changes in biofuel demand brought about by fluctuations in crude oil prices, policy adjustments in major producing countries, and the impact of climate factors on production. These three variables will jointly shape the trajectory of palm oil prices in the next six months. Traders need to pay close attention to the resonance effect of Indonesian policy trends and Malaysian inventory changes. Any data that exceeds expectations may trigger the start of a trend market.

The above content is all about "[XM Foreign Exchange]: Behind the cn.xmfx.mepetition for the 4150 ringgit mark, is the long-short logic of palm oil quietly changing?" It was carefully cn.xmfx.mepiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!

Spring, summer, autumn and winter, every season is a beautiful scenery, and they all stay in my heart forever. Slip away~~~