Technically-driven buying from oversold levels and weakness in the Malaysian ringgit helped palm oil futures rally slightly to settle about 1/4 percent (December contract +6 ringgit per tonne) higher

The technical bounce occurred ahead of cargo surveyor data released after the close that indicated Malaysian palm oil shipments during the first 25 days of September were 20 percent below the same period in August. Concerns about slowing exports and technically-driven selling have driven palm oil futures about eight percent from the high set on August 26. The December contract settled more than six percent above the life-of-contract low set on July 10, which could indicate that prices may continue to move lower if exports are slowing substantially.

Vegetable oil prices on the Dalian exchange were lower with palm oil futures down a little more than 1/2 percent (January contract -28 yuan per tonne) and soybean oil futures off less than 1/4 percent (January contract -8 yuan per tonne). The recent weakness in Malaysian palm oil prices weighed on palm oil contracts, but technically-driven buying below the 50-day moving average and the lower Bollinger band limited the decline. The January contract also tested the key 4,700-yuan level for the second consecutive day and buying at that level also limited losses. Selling at the 6,000-yuan level and the lower Bollinger band drove soybean oil prices lower but buying at the 50-day moving average helped limit the decline.

The weakness in soybean futures and concerns about rising trade tensions left nearby canola futures marginally lower (November contract -C$0.40 per tonne) or unchanged. Losses in deferred futures were more substantial with contracts beyond the July 2020 contract off about 1/2 percent (November 2020 -C$2.00). A reduction in the potential for crop-damaging cold combined with selling above the 10-day moving average weighed on prices but buying at the 50-day moving average limited the decline.

Light profit-taking continued to pressure rapeseed futures with most contracts down less than 1/4 percent (November contract -€0.50) for the third consecutive day. Sellers drove the November contract below the 10-day moving average early in the session but buying below that level limited the decline.

SOYBEAN OIL FUTURES HOLD 29-CENT LEVEL BUT STILL SETTLE LOWER

A reduction in the potential for crop-damaging cold weather across portions of the Corn Belt weighed on soybean futures on Wednesday, with most contracts down 1/2 percent (November contract -5 cents per bushel) or less (November 2020 contract -2 3/4 cents). Concerns that President Trump’s speech at the United Nations, which was critical of the Chinese government’s economic policies, would increase tensions and limit Chinese buyers interest in U.S. soybeans also contributed to the bearish sentiment. Technically-driven selling at the 10-day moving average also drove prices lower, but the November contract still settled within striking range of the psychologically crucial $9 per bushel level. Funds were reported sellers of 5,000 soybean contracts, 3,000 soybean meal contracts, and 2,000 soybean oil contracts.

Growing concerns that President Trump may not implement a program to raise domestic biofuel consumption continued to weigh on soybean oil futures with most contracts down about 1/2 percent (December contract -13 basis points per pound). A statement from Senator Grassley indicating that it was time for President Trump to either announce his proposal or move on triggered early selling that drove the most-actively traded December contract down to test the key 29-cent level but buying at that level, and the 20-day moving average, limited the decline. The December contract also rose close to the 200-day moving average in the overnight session but selling just below that level triggered a steady move lower until just before noon (CDT).