Commodities(B-Trams): Today palm oil market were virtually unchanged on Wednesday, weighed by forecast of growing May inventories and production as we said before.
While today benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange rose 2 ringgit, or 0.06%, to 3,318 ringgit ($722.09) a tonne.
The contract had earlier rose 1.75% to an intraday high but retreated as traders covered short positions.
“Production and stock recovery have cast pressure on the palm market. Output is on course to rise through Q3 on the back of seasonality and easing labour shortages,” Refinitiv Agriculture Research said in a note.
“While palm oil exports are expected to improve in the months ahead, the demand upside could be capped by the unappealing prices compared to soft oils,” it added.
Malaysia’s palm oil inventories at the end of May are expects to rise 6.8% from the month before to 1.6 million tonnes as production swells to its highest so far this year, a Reuters survey showed.
Also Read : Today Palm Oil Market Update , Will Trade Below 3,200 Ringgit?
However, soft oils estimates are for Brazil’s corn crop to increase to 130.93 million metric tons and their soybean crop up slightly to 155.42 million mt. Argentina’s corn production is expected to decrease 1.26 million to 35.75 and soybeans are expected to decrease 2.26 million to 24.74 million. Both USDA expected numbers are much higher than other estimates for Argentine corn and beans. Dalian’s most-active soyoil contract rose 0.03%, while its palm oil contract fell 0.3%. Soyoil prices on the Chicago Board of Trade gained 0.5% after a 3.4% overnight jump.
vMeanwhile, the world’s second-largest producer is forecast to experience weak El Nino conditions from June onwards, the environment minister said.
Top producer Indonesia is expecting a severe dry season from the impact of palm oil by the El Nino weather forecast pattern, threatening harvests and raising forest fire risks, the head of its weather agency said on Tuesday.
Also Read : Palm Oil Market Today June 02 & El Nino Impact On Palm
Refinitiv said a slowdown in rainfall in Southeast Asia so far is conducive to harvesting, but there are concerns about the upcoming El Niño event, which will bring prolonged dry conditions in Indonesia and Malaysia.
Palm oil is affect by price movements in relate oils as they compete for a share in the global vegetable oils market.
