Palm Oil Retreats to One-Week Low

Malaysian palm oil futures extended losses, trading below MYR 4,900 per tonne and touching their lowest level in a week as traders returned from a holiday. Sentiment was pressured by a stronger ringgit and weaker soyoil prices on the Chicago market, while crude oil fell on renewed hopes that the Strait of Hormuz could reopen. Demand concerns also weighed, with cargo surveyor Intertek Testing Services noting that palm oil product exports for August 1–25 dipped 20% from the same period in July. Ample supplies added to the bearish tone, as Malaysian palm oil inventories climbed to a five-month high in July. Separately, exports by top grower Indonesia fell 9.2% yoy in June, according to palm oil association GAPKI. Still, losses were capped by firmer Dalian soyoil prices. Concerns that a developing El Niño could intensify dryness and curb output in Indonesia and Malaysia also provided support, along with Indonesia's planned full implementation of its B50 mandate from Oct 1.

Malaysian palm oil futures hovered below MYR 5,000 per tonne, snapping five sessions of gains and pulling back from their highest level since December 2024. Traders booked profits amid weaker soyoil prices on the Dalian and Chicago markets. Crude oil also eased ahead of an expected announcement from Washington on potential new sanctions against Iran, reducing support for competing vegetable oils. Ample supplies added further pressure, with Malaysian palm oil inventories rising to a five-month high in July. Meanwhile, cargo surveyors noted that palm oil shipments for August 1–20 fell between 5.5% and 13.2% from the same period in July. Still, losses were capped by a weaker ringgit, while buyers in top supplier Indonesia stepped up purchases ahead of the full implementation of the B50 mandate in October. Concerns that a developing El Niño could intensify dryness and curb output in Indonesia and Malaysia also provided underlying support. Markets will be closed Tuesday for a holiday.

Malaysian palm oil futures extended their gains, trading around MYR 4,990 per tonne and reaching their highest level since December 2024. The contract is also on track for its biggest weekly rise in 24 weeks, up nearly 6% so far, marking its third straight weekly advance. The rally was supported by strength in Dalian vegetable oils, while in top producer Indonesia, buyers have stepped up purchases ahead of the full implementation of the B50 biodiesel mandate in October. Meanwhile, the developing El Niño raised concerns of worsening dryness that could curb output in Indonesia and Malaysia. Still, upside was capped by ample supply, with Malaysian inventories climbing to a five-month high in July. Demand risks also weighed, as India’s refiners may favor cheaper soyoil, with record imports expected in August. Meanwhile, cargo surveyors estimated palm oil shipments during August?1–20 fell 5.5%–13.2% from the same period in July, underscoring weak export momentum.