Crude palm oil prices closed lower on Thursday

According to David Ng, a Kuala Lumpur-based trader at Iceberg X, crude palm oil prices closed lower, erasing some of Wednesday’s gains due to weaker soybean oil prices. Ng also notes that recent poor export performance is also weighing on investor sentiment. He forecasts crude palm oil prices to hold above 4,500 ringgit per tonne, with resistance at 4,700 ringgit per tonne.

Malaysian palm oil futures fell more than 1% on Thursday, reversing gains from the previous session, as weakening export demand, along with weaker soybean oil and crude oil prices, weighed on the market.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange fell 75 ringgit, or 1.6%, to 4,602 ringgit (US$1,147.63) per metric tonne at the close.

The market decline was driven by weakening soybean oil and crude oil prices during the Asian trading session, as well as a recent decline in palm oil demand, noted David Ng, a trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.

The most-active Dalian soybean oil contract fell 0.63%, while the CPO1 palm oil contract fell 1.59%. Soybean oil prices on the Chicago Mercantile Exchange fell 0.19%.

Palm oil prices are tracking the price movements of competing edible oils as it competes for share in the global vegetable oil market.

According to shipping experts, Malaysian palm exports fell by 8.8% to 15.5% in May compared to the previous month.

Oil prices fell after a ceasefire agreement between Israel and Lebanon raised hopes for a broader agreement to end the US-Israeli war with Iran, which could lead to the reopening of the Strait of Hormuz.

Weaker oil futures make palm oil a less attractive option for biodiesel production.

The ringgit weakened 0.5% against the dollar, making the commodity cheaper for buyers holding foreign currency.

Malaysia’s palm oil stockpiles are expected to rise for a second straight month in May as slowing exports outweigh the impact of lower production, according to a Reuters poll.

Tags: prices, palm oil