Mumbai, June 24 (Commodities Control): Malaysian palm oil futures experienced a slight decline on Monday, mirroring movements in Chicago soyoil, as the market remained range-bound due to persistent weakness in crude oil prices and other competing edible oils.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange dipped 1 ringgit to 3,899 ringgit ($827.55) a ton by midday, following a 1.49% decrease on Friday.
Market analysts attribute the initial gap-down opening to technical factors, but anticipate a recovery from key support levels due to strengthening Chicago soy oil futures.
Recent export data from independent inspection companies AmSpec Agri Malaysia and Intertek Testing Services revealed an 8.1% to 12.9% decrease in Malaysian palm oil product exports for the period of June 1-20, compared to the previous month. Market participants eagerly await the release of export estimates for June 1-25 on Tuesday.
Downward pressure on crude oil prices stemmed from renewed concerns about prolonged higher interest rates, which bolstered the dollar, counteracting the supportive effects of geopolitical tensions and OPEC+ supply cuts on oil markets. The weaker crude oil futures reduce the appeal of palm oil as a biodiesel feedstock.
While Dalian's most-active soyoil contract remained unchanged, its palm oil contract experienced a 0.44% decline. Conversely, soyoil prices on the Chicago Board of Trade rose by 0.32%.
Market dynamics in related oils, such as soyoil, influence palm oil prices due to their competition for market share in the global vegetable oils market.
Forecasted dryness in the Black Sea region's breadbasket poses a risk to sunflower and corn yields, while excessive rainfall in the United States following near-record temperatures threatens to negatively impact crops. These factors could potentially disrupt global supplies and drive prices higher.
The palm oil market is currently navigating a complex landscape, influenced by factors such as crude oil price fluctuations, export data, and weather-related concerns in key agricultural regions. While short-term volatility is expected, the market remains sensitive to evolving supply and demand dynamics, as well as potential disruptions in global crop production.
Global Futures Palm oil and Soy Oil
(By Commoditiescontrol Bureau; +91-9820130172)
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