Palm oil extends losing streak to end at lowest in six weeks

Malaysian palm oil futures closed lower on Wednesday for a fourth straight session, slipping to their lowest closing in six weeks, as competitive pricing of rival edible oils weighed on demand.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed down 1.52%, to 4,012 ringgit ($837.58) a metric ton, its lowest closing since March 5.

“The latest USDA World Agricultural Supply and Demand Estimates (WASDE) report presented bearish figures, prompting funds to unwind positions and build short interests across the grains and oilseed sectors,” said Marcello Cultrera, director at Singapore-based commodities consultancy Apricus 8.

This has impacted trading strategies and triggered a downward reversal on the Dalian and Malaysian bourses, Cultrera added.

Dalian’s most-active soyoil contract DBYcv1 fell 1.5%, while its palm oil contract DCPcv1 eased 2.4%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.4%.

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

“Such movement is likely to boost demand in the short term, given the current tightness in destination markets,” Cultrera said.

Some traders said buying from key destinations had been muted, partly due to more attractive pricing of competing edible oils.

India’s oilmeal exports in 2023/24 jumped 13% from a year earlier to reach the highest level in a decade as shipments of soymeal more than doubled, a leading industry body said Wednesday.

Oil prices slipped for the third straight session on Wednesday as likely higher U.S. commercial inventories weighed, while weaker economic data from China and dimmed prospects of interest rate cuts stoked worries about global demand.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Source: Reuters (Reporting by Mei Mei Chu; Editing by Subhranshu Sahu and Shounak Dasgupta)