Malaysian palm oil futures ended higher on Thursday

Malaysian palm oil futures closed higher for the second consecutive day on Thursday, supported by stronger competing vegetable oils.

Analysts at Kenanga Futures noted that the rise in palm oil prices was driven by higher prices for competing oils the previous day and recent stronger export data. According to estimates from cargo valuation firm AmSpec Agri Malaysia, Malaysia’s palm oil exports for the period from June 1 to 10 increased by 4.9% compared to the previous month. They also added that the weakening Malaysian ringgit could have contributed to further increased buying activity. The brokerage estimates support and resistance levels for the August futures contract at 4,500 ringgit per tonne and 4,630 ringgit per tonne, respectively.

The benchmark FCPO3 palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange rose 17 ringgit, or 0.37%, to 4,555 ringgit (US$1,120.82) per metric ton at the close.

The market traded higher thanks to positive price movements in competing oilseeds during Asian trading hours, a Kuala Lumpur-based trader said.

The most-active Dalian soybean oil contract rose 0.55%, while the CPO1 palm oil contract rose 1.17%. Soybean oil prices on the Chicago Mercantile Exchange fell 0.09%.

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

Oil prices fell after a previous rally triggered by the recent escalation of the conflict between the US and Iran, as traders assessed the actual impact of supply disruptions.

Weaker oil futures are making palm oil a less attractive option for biodiesel feedstock.

The ringgit strengthened 0.07% against the dollar, making the commodity somewhat more expensive for buyers holding foreign currency.

Malaysia’s palm oil inventories increased for the second month in May, as a continued decline in exports outpaced a decline in production, according to industry regulator data.

Freight industry experts estimate that Malaysian palm oil exports from June 1 to 10 increased by 3.5-4.9% compared to the previous month.

Tags: prices, palm oil