Palm Oil Eases Further as Quarter Ends, Monthly Gain Intact

Malaysian palm oil traded below MYR 4,600 per tonne, extending recent losses as a firmer ringgit and weakness in rival edible oils on the Dalian and Chicago exchanges weighed on sentiment. Crude oil prices also fell amid the prospects of possible U.S.-Iran talks, reducing support for edible oil markets. Still, palm oil is on track to post a modest monthly gain, up about 0.3% so far, after declining in the previous two months, supported by signs of stronger demand, weather-related supply concerns, and higher biodiesel mandates in major producing countries. In key consumer China, business activity improved in June as both manufacturing and services expanded modestly, offering some support to the demand outlook. Even so, prices remain set for a sharp quarterly loss, reversing a near 20% surge in the first quarter. Traders now await full-June Malaysian export estimates from cargo surveyors after shipments during the first 25 days of the month rose 10.6%–11.1% from the same period in May.

Malaysian palm oil futures hovered above MYR 4,550 per tonne, extending modest gains as stronger edible oil prices on Dalian and Chicago exchanges supported sentiment. Higher crude oil prices also improved palm’s appeal as a biodiesel feedstock. Firmer exports also added support, with cargo surveyors noting shipments rose between 10.6%–11.1% in the first 25 days of June. Supply fundamentals stayed constructive as weather risks clouded production prospects. Meantime, top producer Indonesia will roll out its B50 biodiesel mandate from July 1, with a three-month transition for retailers to clear stocks, reinforcing expectations of stronger domestic consumption. In India, imports are projected to exceed 600,000 tonnes in June, up from 549,356 tonnes in May, underscoring robust demand from the world’s largest buyer. Gains, however, were capped by a firmer ringgit and cautious positioning ahead of China’s PMI data later this week, which may offer fresh clues on demand from the key consumer.

Malaysian palm oil futures hovered near MYR 4,600 per tonne, rebounding from recent declines as stronger vegetable oil prices on China’s Dalian Exchange lifted sentiment. Firmer export demand also lent support, with cargo surveyors estimating shipments rose 10.6%–11.1% in the first 25 days of June. Meanwhile, top supplier Indonesia moved to roll out its B50 biodiesel mandate from July 1, with a three-month transition period for retailers to clear existing stocks, reinforcing views of higher domestic consumption. Supply concerns also persisted as weather-related risks continued to cloud production. In India, palm oil imports are expected to top 600,000 tonnes in June, up from 549,356 tonnes in May, underscoring robust demand from the world’s largest buyer. However, the contract remained on track for a weekly loss of about 1%, reversing the prior week’s strong gains as a firmer ringgit and a sharp drop in crude oil prices, amid easing Middle East supply concerns, capped upside momentum.