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Palm Oil Futures Market & Updates | March 27, 2024

Malaysian Palm Oil Futures Decline Amidst Global Concerns

Malaysian palm oil futures witnessed a downturn for the second consecutive session, reaching a two-week closing low on Wednesday, following a trend observed in other competing oils.The benchmark palm oil contract for June delivery, listed on the Bursa Malaysia Derivatives Exchange, observed a decrease of 101 ringgit, equivalent to 2.38%, settling at 4,135 ringgit ($874.39) per metric ton during the closing session. This marked the lowest closing figure since March 13.

Month Last Open Change High Low
Apr’24 4251 4330 -81 4338 4250
May’24 4203 4298 -94 4301 4200
Jun’24 4131 4238 -105 4238 4128
Jul’24 4043 4145 -103 4145 4040

Click Here To View March 26, 2024 Report

Influence of Rival Oils

The decline in palm oil prices to the softer performance of rival oils. The prevailing discounts of soft oils in comparison to crude palm oil have raised concerns regarding exports for key producers such as Malaysia and Indonesia.

  • Performance of Competing Oils

On the Dalian Commodity Exchange, the soyoil contract experienced a decline of 2.14%, whereas its palm oil counterpart lost 2.38%. Similarly, soyoil prices on the Chicago Board of Trade witnessed a decrease of 1.53%.

Factors Affecting Soybean and Corn Futures

The decline in soybean and corn futures can be attributed to ample supply in the market. Furthermore, anticipation regarding U.S. planting and grain stocks data, scheduled for release on Thursday, is influencing market sentiments.

  • Impact of Crude Oil Market Trends

Crude oil futures also experienced a decline for the second consecutive day, plummeting by over 1% on Wednesday due to the surge in U.S. stockpiles. Additionally, indications suggest that the OPEC+ producer group is unlikely to alter its output policy at an upcoming meeting, further affecting oil prices. The decrease in crude oil futures renders palm oil a less appealing option for biodiesel feedstock.

Market Projections

Fitch Ratings, in its assessment on Wednesday, projected a weakening of Malaysian benchmark crude palm oil prices from the second quarter of the year. This projection is based on the expectation of higher vegetable oil supply globally. Additionally, favorable weather conditions and reduced fertilizer costs are anticipated to bolster output growth, exerting sustained pressure on prices over the next 12-18 months.

In conclusion, Malaysian palm oil futures underscores the intricate interplay of various factors within the global market. While softer rival oils and ample supply exert downward pressure on prices, anticipation regarding key data releases and the trajectory of crude oil futures further contribute to market volatility. So we are predicting that’s market will moves Neutral To Slightly Bearish Position due to narrow gap between rival soft edibles oils, it may hovering in the range of MYR3,700 to MYR4,300 per ton.