The Bursa Malaysia Derivatives (BMD) contract for August delivery saw a modest increase, defying a decline in CBOT soyoil prices on Thursday. The upward movement is driven by robust demand in the cash market from South Asian nations, providing crucial support to palm oil prices. Additionally, stronger soybean oil prices in overnight trading on the Chicago Board of Trade and palm olein gains on the Dalian Commodity Exchange further supported the palm oil prices.
The BMD near-month June contract rose by 40 MYR/MT, settling at 3,893 MYR/MT, while the most active August contract gained 21 MYR/MT, trading at 3,915 MYR/MT.
Strong demand in the cash market has been instrumental in supporting palm oil prices. However, increasing production and the expectation of declining demand are anticipated to exert downward pressure on prices. Furthermore, ample soybean supply is expected to add additional pressure on palm oil prices in the near term.
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