Palm oil futures closed lower on Thursday

UkrAgroConsult

According to analysts at Kenanga Futures, prices were likely pressured by a decline in activity in the competing vegetable oil markets the previous day, as optimism about a potential US-Iran deal reduced risk premiums in the Middle East and likely limited overall oil price gains. They also note that concerns about weakening export demand and continued profit-taking could have weighed on prices.

Malaysian palm oil futures closed down more than 2% on Thursday, extending their second consecutive session of decline, as sluggish export demand and lower oil prices also weighed on the market.

The benchmark FCPO palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange fell 126 ringgit, or 2.75%, to close at 4,457 ringgit (US$1,125.51) per metric tonne.

According to shipping experts, Malaysian palm oil exports from May 1 to 20 fell between 13.9% and 20.5% compared to the previous month.

The most-active Dalian soybean oil contract fell 0.97%, while the CPO1 palm oil contract declined 2.02%. Soybean oil prices on the Chicago Mercantile Exchange fell 0.92%.

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

Oil prices fell on Thursday, extending their decline from the previous session, as investors focused on peace talks between the US and Iran and economic activity in the eurozone contracted sharply.

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

The ringgit strengthened 0.2% against the dollar, making the commodity slightly cheaper for buyers holding foreign currency.

Tags: prices, palm oil