06/06/2023 (Nasdaq), Kuala Lumpur - Malaysian palm oil futures closed lower on Tuesday after a survey forecast higher stockpiles as production swelled to a five-month high, while a softer ringgit lent some support to the market.

The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange slid 61 ringgit, or 1.8%, to 3,320 ringgit ($720.96) a tonne, after two consecutive sessions of gains.

May stockpiles are seen rising 6.8% to 1.6 million tonnes month-on-month. Production in the world's second-largest producer is expected to surge 21% to 1.45 million tonnes, according to the survey.

The ringgit MYR=, palm's currency of trade, fell 0.66% against the dollar, making the commodity cheaper for holders of foreign currency.

Top producer Indonesia is expecting a severe dry season from the impact of the El Nino weather pattern, threatening harvests and raising the risks of forest fires, the head of its weather agency said.

The European Commission said on Monday it was extending until Sept. 15 an arrangement whereby five of Ukraine's EU neighbours can restrict imports of Ukrainian grain, including sunflower seeds.

Dalian's most-active soyoil contract DBYcv1 rose 0.14%, while its palm oil contract DCPcv1lost 0.5%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.1%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

($1 = 4.6050 ringgit)

Source: Reuters

https://www.nasdaq.com/articles/vegoils-palm-ends-lower-on-prospects-of-higher-may-stockpiles-output