Malaysian Palm Oil Futures Decline Amidst Global Concerns
Malaysian palm oil futures witnessed a decline on Tuesday, attributed to profit-taking activities. Additionally, the market was influenced by a stronger ringgit and the decreased performance of rival edible oils. The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange experienced a slight dip of 10 ringgit, equivalent to 0.24%, closing at 4,237 ringgit per metric ton. This marked the lowest closing point in the span of two days, contrasting with an intraday high of 4,280 ringgit.
| Month | Last | Open | Change | High | Low |
| Apr’24 | 4333 | 4361 | -19 | 4382 | 4329 |
| May’24 | 4298 | 4319 | -16 | 4346 | 4284 |
| Jun’24 | 4237 | 4254 | -10 | 4280 | 4225 |
| Jul’24 | 4147 | 4165 | -7 | 4188 | 4138 |
| CPO FUTURES PRICES IN RINGGIT | |||||
Market Analysis and Expert Insights
The market seems to be “taking a breather” after substantial gains resulting from a gradual increase in production amidst robust exports.
- Currency Dynamics
The Malaysian ringgit, the currency of trade for palm, saw a strengthening of 0.13% against the dollar. This appreciation in the ringgit’s value renders palm oil less appealing for foreign currency holders.
External Influences and Future Projections
- Market Anticipation and Global Factors
Investors are eagerly awaiting the release of U.S. consumer confidence and trade figures, anticipating further insights to guide market direction.
- Performance of Rival Edible Oils
Dalian’s most-active soyoil contract experienced a decline of 0.54%, while its palm oil contract faced a loss of 0.41%. Similarly, soyoil prices on the Chicago Board of Trade decreased by 0.35%. These downturns in rival edible oils contribute to the complex dynamics within the global vegetable oils market, impacting palm oil prices.
Analyst Predictions and Technical Analysis
Pranav Bajoria, director of Comglobal Pte Ltd, a brokerage firm in Singapore, noted that palm oil continues to maintain a premium position compared to soft oils due to limited availability. This premium is expected to persist in the near future.
- Future Outlook and Resistance Levels
LSEG Agriculture Research’s weekly report forecasts a potential rise in palm oil prices towards the resistance levels of 4,400-4,420 ringgit per ton. Support levels are identified at 3,980-4,000 ringgit.
In conclusion, Malaysian palm market reveals a delicate interplay of domestic and global factors. As, these uncertainties, a comprehensive understanding of the evolving dynamics for Palm trade in Neutral To Bullish Position due to narrow gap between rival soft edibles oils, it may hovering in the range of MYR3,700 to MYR4,300 per ton.
