Palm Oil Futures Edge Higher Amid Strong External Support
Malaysian palm oil futures closed higher on Wednesday, lifted by strength in global rival oils and favorable currency conditions. The benchmark September delivery contract on the Bursa Malaysia Derivatives Exchange gained 37 ringgit, or 0.91%, to settle at 4,101 ringgit ($965.40) per metric ton.
A Kuala Lumpur-based trader noted the market remained “range-bound but with a positive bias,” primarily supported by:
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Soyoil gains on the Chicago Board of Trade (CBOT) and Dalian Commodity Exchange
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A weaker Malaysian ringgit, making exports more competitive
Rival Oils Boost Sentiment Across the Board
Palm oil prices are heavily influenced by movements in other edible oils. The following developments added upward pressure:
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CBOT soyoil rose 0.2%
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Dalian soyoil surged 1.46%
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Dalian palm oil climbed 0.73%
These gains encouraged technical buying in Malaysian palm oil futures, as global buyers reacted to tightening supplies and potential weather-related uncertainties in key oilseed-growing regions.
Weaker Ringgit Enhances Export Appeal
The Malaysian ringgit slipped 0.12% against the U.S. dollar, which significantly impacts palm oil pricing since it is traded internationally in ringgit. A weaker local currency makes Malaysian palm oil cheaper for foreign buyers, spurring demand and export orders.
This currency trend provided a tailwind to pricing, even as crude oil futures edged lower on the day.
Crude Oil Dip Limits Biodiesel Optimism
Oil prices fell on Wednesday after surging over 4% in the previous session, as global markets digested risks tied to the escalating Iran-Israel conflict and the prospect of U.S. military involvement.
Since palm oil is used as a feedstock in biodiesel production, falling crude prices can reduce its attractiveness in the energy mix. Nonetheless, this downside was offset by strength in rival edible oils and the weak ringgit.
Palm Oil Exports Jump in June: A Bullish Signal
Export data released mid-month added momentum to the market. According to cargo surveyors:
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Intertek Testing Services reported a 26.3% rise in Malaysian palm oil exports from June 1–15, compared to the same period in May.
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AmSpec Agri Malaysia indicated a 17.8% increase in the same time frame.
This surge reflects strong overseas demand, possibly driven by:
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Stockpiling in key markets like India and China
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Seasonal demand shifts post-Ramadan
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Favorable price arbitrage due to currency devaluation
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Outlook: Cautious Optimism Amid Global Volatility
Although oil prices and geopolitical uncertainties cast a shadow, Malaysian palm oil futures are showing signs of resilience. Traders are watching:
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Further currency movements
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Crude oil trends
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Edible oil price trajectories
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Upcoming Malaysian Palm Oil Board (MPOB) inventory data
With demand recovering and export performance strengthening, the outlook for palm oil remains moderately bullish, albeit within a narrow trading range.
