Palm ends lower for second session on output outlook, bullish demand caps fall
- Dalian’s most-active soyoil contract fell 0.11%
KUALA LUMPUR: Malaysian palm oil futures ended lower on Monday for a second straight session, as anticipated rising output weighed on the market, though bullish demand in July and expectations that momentum will carry into this month capped the decline.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was down 14 ringgit, or 0.3%, at 4,629 ringgit ($1,130.96) a metric ton at the close. The contract fell 0.85% in the previous session.
There are signs that July exports were better than the prior month, especially those sent to India, but production for July will remain within what analysts have estimated, at 7% to 9% higher, said Paramalingam Supramaniam, director of the Selangor-based brokerage Pelindung Bestari.
“All eyes are on the demand for August and there is an expectation that it would be as good as July,” he added. Cargo surveyors estimated that exports of Malaysian palm oil products for July rose between 12.1% and 19.5% from a month earlier.
Reuters survey showed that Malaysia’s palm oil exports jumped 14.8% in July as production increased by 7.4%, pushing inventories to a five-month high.
The Malaysian Palm Oil Board is expected to release its monthly supply-and-demand data on August 10.
Dalian’s most-active soyoil contract fell 0.11%, while its palm oil contract shed 0.88%. Soyoil prices on the Chicago Board of Trade were down 0.21%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices fell more than $4 a barrel after U.S. President Donald Trump held off a fresh attack on Iran as he sought a quick deal that would halt Tehran’s nuclear ambitions and reopen the Strait of Hormuz.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.24% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
Comments