Mumbai, 08 May, (CommoditiesControl): Malaysian palm oil futures relinquished earlier gains on Wednesday, mirroring the downward trend in soyoil prices, while renewed apprehensions regarding palm exports emerged
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange dipped 15 ringgit, or 0.38%, to 3,915 ringgit ($825.25) per metric ton by midday break.
Dalian's most-active soyoil contract edged up by 0.05%, whereas its palm oil contract experienced a modest uptick of 0.19%. Conversely, soyoil prices on the Chicago Board of Trade witnessed a decline of 0.61%.
Continuing its downward trajectory for a second consecutive session, soybean prices sustained losses as the impact of the Brazilian flood was perceived to be less severe than previously anticipated.
While recent weather anomalies have lent support to palm prices, concerns persist regarding lagging exports, potentially capping any significant rally, as noted by the sources.
According to a Reuters poll, Malaysia's April palm oil exports are anticipated to have declined by 7.79% month-on-month to 1.22 million tons, amidst heightened price competition from other edible oils.
Forecasting from LSEG Weather Research indicates that the summer of 2024 is expected to hover around the neutral-negative El Nino Southern Oscillation phase, with the possibility of reaching the La Nina threshold closer to August. The advent of La Nina in the third quarter could alleviate drought risks, which bodes well for palm cultivation.
Declining oil prices, attributed to burgeoning crude and fuel inventories in the U.S. signaling weak demand, alongside cautious supply projections ahead of an OPEC+ meeting next month, contributed to the overall market sentiment.
The Malaysian ringgit, the currency of trade for palm oil, experienced a 0.17% depreciation against the dollar.
Traders may consider initiating short positions if prices on the 15-minute timeframe fall and close below the 3900 level, targeting 3835, with a stop loss placed at
3925 to manage risk effectively.
Global Palm oil and Soyoil Futures
(By Commoditiescontrol Bureau; +91-9820130172)