Palm Oil Rebounds Before Midweek Break

Malaysian palm oil futures climbed about 1.7% to above MYR 4,500 per tonne, reversing losses in the previous two sessions as a weaker ringgit and firmer palm oil prices on the Dalian exchange boosted sentiment. Support also came from stronger exports, with cargo surveyors noting that palm oil shipments during June 1–15 rose between 9.6% and 23.8% from May. Simultaneously, El Niño is expected to reduce Malaysian palm oil yields by 8%–10% this year. However, gains were capped by weaker rival edible oils on Chicago markets. Meanwhile, Malaysia has cut its July crude palm oil reference price to a level that keeps the export duty unchanged at 10%. In top buyer India, palm oil imports edged higher in May from April's four-month low but remained below normal levels. Analysts view the rally to lose momentum, citing the prospect of lower crude oil prices following the U.S.-Iran peace deal and weaker consumer spending in China, a key consumer. Markets will be closed Wednesday for a holiday.

Malaysian palm oil futures fell further, hovering below MYR 4,500 per tonne and hitting their lowest level in three weeks, pressured by a stronger ringgit and weakness in rival edible oils on the Dalian and Chicago exchanges. Sentiment was further dampened by a sharp drop in crude oil prices, which retreated to their lowest since March, after the U.S. and Iran reached an initial deal to end hostilities and reopen shipping through the Strait of Hormuz. Meanwhile, Malaysia's lower July crude palm oil reference price kept export duty at 10%, offering little support to exports. Still, losses were capped by firmer demand, with cargo surveyors noting shipments during June 1–10 rose between 3.5% and 4.9% from May. Weather risks also lent support after Kuala Lumpur warned El Niño could cut yields by 8%–10% this year. In top buyer India, palm oil imports edged higher in May from April's four-month low but stayed below normal as refiners favored cheaper soyoil amid palm oil’s narrowing premium.

Malaysian palm oil futures edged higher to above MYR 4,550 per tonne, extending recent gains. The market was also on track for a fourth straight weekly advance, up around 0.3% so far this week. Sentiment remained supported by stronger export demand, with cargo surveyors estimating that Malaysian palm oil shipments during June 1–10 rose between 3.5% and 4.9% from the same period a month earlier. Traders also tracked weather risks after Kuala Lumpur warned that El Niño could cut yields by 8% to 10% this year. However, upside was capped by a stronger ringgit and weaker rival oils in Dalian and Chicago markets. Meanwhile, crude oil continued to slide, as Middle East tensions eased, reducing support for vegetable oils. On the demand side, imports by top buyer India grew slightly in May from April’s four-month low but stayed below normal levels. Separately, industry data showed Malaysia’s inventories increased for a second month in May, underscoring ample supply.