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Palm Oil's Brief Rally Fails to Overcome Weekly Downtrend

7 Jun 2024 3:56 pm
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Mumbai, June 06 (Commoditiescontrol): Malaysian palm oil futures experienced a second consecutive day of gains on Friday, mirroring the strength seen in crude oil prices. However, the commodity still recorded a weekly loss due to subdued demand and increasing supplies.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange settled 0.4% higher at 3,976 ringgit ($848.12) per metric ton. Despite this uptick, the contract has declined over 2% throughout the week. Market analysts suggest that the current trading range of 3,800-4,000 ringgit is likely to persist unless there is a significant surge in demand.
Other vegetable oil markets also saw mixed results. Dalian's most-active soyoil and palm oil contracts gained 1.8% and 2% respectively, but both experienced weekly losses. In contrast, soyoil prices on the Chicago Board of Trade dipped 0.5%.
The palm oil market is closely tied to the movements of related oils, as they compete for share in the global vegetable oils market. Crude oil prices remained relatively stable after a recent increase, following assurances from OPEC+ members Saudi Arabia and Russia regarding their willingness to adjust output agreements. Higher crude oil prices typically boost the attractiveness of palm oil as a biodiesel feedstock.
Market participants are eagerly awaiting the release of the Malaysian Palm Oil Board's (MPOB) monthly data on June 10th. A Reuters poll anticipates a slight increase in palm oil inventories to 1.75 million metric tons by the end of May, while exports of palm oil products are expected to have surged by 14.32% to 1.41 million tons during the same period. Additionally, India's palm oil imports reportedly rose by 12.4% in May, further impacting the market.
Despite recent gains driven by firm crude oil prices, Malaysian palm oil continues to face downward pressure due to lackluster demand and rising supplies. The upcoming MPOB data will provide further insights into the market's trajectory.
Global Futures Palm oil and Soy Oil

(By Commoditiescontrol Bureau; +91-9820130172)

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