VEGOILS-Palm hits one-week closing low on rising stockpile concerns
09.06.2023 (Hellenic Shipping News) - Malaysian palm oil futures fell to a one-week closing low on Thursday as prospects of rising inventories outweighed support from a weaker ringgit.
The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange slipped 57 ringgit, or 1.72%, to 3,263 ringgit ($706.74) a tonne, its lowest closing since May 31.
The contract is tracking profit-taking in Chicago soyoil futures from Wednesday’s high and rising palm oil supply in both Malaysia and Indonesia, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Expectations of wet weather in parts of the U.S. Midwest are weighing on soybean and soyoil prices, he added.
Earlier this week, the Malaysian Palm Oil Association forecast May production to jump 26.3% from the month before, according to traders and analysts.
Investors are awaiting data from the Malaysian Palm Oil Board, scheduled on June 12, to assess the extent of the production rise.
Capping losses, the ringgit MYR=, palm’s currency of trade, fell 0.48% against the dollar, making the commodity cheaper for holders of foreign currency.
Malaysia, the world’s second-largest palm oil producer, is expected to experience weak El Nino conditions from June onwards, with the intensity of the weather phenomenon likely increasing to moderate levels by November, the country’s environment minister said on Wednesday.
Indonesian President Joko Widodo called for better collaboration with neighbouring Malaysia to fight what he called “discrimination” against their countries’ palm oil products.
Dalian’s most-active soyoil contract DBYcv1 fell 0.45%, while its palm oil contract DCPcv1 eased 0.4%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Source: Reuters (Reporting by Mei Mei Chu; Editing by Sherry Jacob-Phillips and Janane Venkatraman)