Palm oil inch up on output concerns, shrinking exports limit
Malaysian palm oil futures closed higher on Wednesday, driven by expectations of reduced production despite concerns over shrinking June exports, keeping prices near six-week lows. The September contract on Bursa Malaysia rose 0.47% to 3,877 ringgit per metric ton but had earlier dipped by 0.75%. Production forecasts by the Malaysian Palm Oil Association indicate a 6.3% decline from last year. Export estimates for June 1-25 suggest a decrease of 16.1% to 16.9% compared to May, impacting market sentiment amidst competitive pressures from related oils globally.
BEIJING, June 26 (Reuters) -Malaysian palm oil futures ended higher onWednesday on forecasts of lower production in the world’s second-largest producer, although estimates of shrinking June exports kept the contract near six-week lows.
The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange closed up 18 ringgit, or 0.47%, to 3,877 ringgit ($823.14) a metric ton, but hovered near its lowest since May 17.
It had earlier declined as much as 0.75%.
The Malaysian Palm Oil Association forecast production during June 1-20 to decline 6.3% from a year ago, traders and analysts said.
Exports from Malaysia are also weak, with cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia on Tuesday estimating shipments during June 1-25 likely fell between 16.1% and 16.9% from the same period in May.
Another cargo surveyor Societe Generale de Surveillance (SGS) estimates exports for the period at 908,517 metric tons, down from 949,451 metric tons shipped during a month-ago period.
In related oils, Dalian’s most-active soyoil contract DBYcv1 gained 0.5%, while its palm oil contract DCPcv1 rose 0.9%. Soyoil prices on the Chicago Board of Trade BOcv1 were also up 0.9%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices inched up nearing their highest level in almost two months, driven by forecasts for an eventual inventory drawdown during the third quarter peak summer demand season and geopolitical risks from the Middle East conflict. O/R
Higher crudeoil futures make palm a more attractiveoption for biodiesel feedstock.
Source Link : https://www.xm.com/research/markets/allNews/reuters/palm-oil-inch-up-on-output-concerns-shrinking-exports-limit-53868409
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