More downside risk for palm oil going into Q3
The Star Online (26/06/2018) - KUALA LUMPUR: OCBC maintains bearish outlook for palm oil prices in 2H as supplies expected to rise in 3Q amid lacklustre demand, analyst Barnabas Gan says in report on Tuesday.
Prices in 3Q seen dropping to RM2,250 a tonne, before slightly recovering to RM2,400 toward the year-end as supplies dwindle during that period.
Demand has been "surprisingly weak" into June, a key driver of falling palm oil prices, he says
Demand was also weak pre-Ramadan due to lower demand from India, the EU and the Netherlands.
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Crude palm oil supplies are expected to further rise into October due to seasonal factors, which could "keep palm oil bulls at bay" for now.
Palm fruit production, oil yields traditionally pick up in 3Q.
Trade tariffs and China’s threat to restrict US soybean imports should drive palm oil prices higher
Normal weather expected for now; any swings in palm prices due to weather is highly unlikely at this point.
Movement in palm oil prices will also hinge on other growth-related commodities, including copper, crude oil. – Bloomberg