Palm oil futures saw a slight firming on Monday, influenced by the rising Chicago soyoil prices. Despite this, the futures remained confined within a range due to persistent weakness in crude oil and other competing edible oils. The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange increased by 12 ringgit, or 0.31%, reaching 3,912 ringgit ($830.57) per ton by the midday break. This was a recovery from a 1.49% fall on Friday. However, the contract was still down by 1.17% over the previous week.
Anilkumar Bagani, research head at the Mumbai-based vegetable oils broker Sunvin Group, noted that palm oil opened lower due to a technical break but showed signs of recovery from key support levels, driven by the strength in Chicago soy oil futures. Export data revealed that Malaysian palm oil product exports for June 1-20 fell by 8.1% to 12.9% compared to the previous month, according to independent inspection companies AmSpec Agri Malaysia and Intertek Testing Services. Traders are now awaiting export estimates for June 1-25, expected to be released on Tuesday.
Crude oil prices edged down on Monday due to renewed concerns about prolonged high interest rates, which strengthened the dollar. This overshadowed the support from geopolitical tensions and OPEC+ supply cuts in the oil markets. Weaker crude oil futures make palm oil a less appealing option for biodiesel feedstock.
In other markets, Dalian’s most-active soyoil contract remained unchanged, while its palm oil contract dropped by 0.44%. Soyoil prices on the Chicago Board of Trade rose by 0.32%. Palm oil prices are influenced by movements in related oils, as these oils compete for a share in the global vegetable oils market.
Forecasted dryness in the Black Sea region threatens to reduce sunflower and corn yields, while heavy rainfall in the United States, following near-record temperatures, poses a risk to crops. These factors are likely to impact global supplies and drive prices higher. Reuters technical analyst Wang Tao predicted that palm oil prices might break the support level of 3,889 ringgit per metric tonne and fall within the 3,811-3,843 ringgit range.
Dekel Agri-Vision PLC (LON:DKL) aspires to become a leading agro-industrial company in West Africa, one that creates value for shareholders whilst at all times placing the interests of the local communities and environment in which it operates in at the heart of its operations.
