SINGAPORE: Malaysian palm oil futures tracked Chicago soyoil lower on Monday, while lower estimations of Malaysian palm oil exports in June also weighed on sentiment.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed down 58 ringgit, or 1.46%, at 3,917 ringgit ($830.05) a metric ton to snap a two-day winning streak.
Malaysia’s palm oil stocks rose marginally to a three-month high in May, as strong exports were offset by a rebound in production, data showed on Monday.
Malaysian palm oil production in May sharply increased by 13.48%, largely due to seasonal factors, said Sandeep Singh, director of The Farm Trade, a Kuala Lumpur-based consulting and trading firm.
Exports from June 1-10 “are expected to be more than 20% down”, further adding to bearish sentiments, while production is likely to continue rising, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Palm gains on firm crude but logs weekly decline
Cargo surveyors Intertek Testing Services and AmSpec Agri said exports of Malaysian palm oil products for June 1-10 fell 20.4% and 21.6%, respectively, compared to May 1-10.
Palm oil prices moving forward will also be highly dependent on the performance of rival soft oils, Bagani added.
Soyoil prices on the Chicago Board of Trade slid 0.46%, weighed down by favourable crop conditions in the United States, where farmers have made steady progress in planting corn and soybeans while starting winter wheat harvesting.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices edged up on Monday, buoyed by hopes of rising fuel demand this summer, though gains were capped by a strengthening of the dollar on receding expectations of imminent cuts to U.S. interest rates.
Dry weather “will persist across the palm oil belts of Sumatra and West Malaysia”, while wet spells “may support palm growth across Kalimantan and Sabah palm oil belts”, according to an LSEG forecast on Friday.
The Malaysian ringgit, palm’s currency of trade, weakened 0.66% against the dollar.
Comments
Comments are closed.