NEW DELHI: Malaysian palm oil futures opened lower on Thursday, a day after the industry regulator said inventories in June surged to a four-month high.
Malaysian palm oil futures extend losses on rising stocks
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange lost 6 ringgit or 0.15%, to 3,912 ringgit ($834.65) in early trading.
Fundamentals
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Malaysia’s palm oil stocks at the end of June rose 4.35% from May to 1.83 million metric tons, the highest since February, the Malaysian Palm Oil Board (MPOB) said on Wednesday.
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The MPOB attributed the rise in stocks to a steeper decline in exports compared to production.
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Crude palm oil production declined 5.23% from May to 1.62 million tons, while palm oil exports plunged 12.82% to 1.21 million tons.
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A Reuters survey had forecast inventories at 1.83 million tons, with output at 1.62 million tons and exports at 1.24 million tons.
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Crude palm oil prices are expected to remain supported by tighter production conditions and strong demand from top buyers India and China, state agency Malaysian Palm Oil Council (MPOC) said.
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Soyoil prices on the Chicago Board of Trade rose 0.9%.
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Palm oil is affected by price movements in related oils as they compete for a share of the global vegetable oils market.
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Palm oil may retest support at 3,876 ringgit per metric ton, as its fall looks incomplete.
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