Palm falls on weaker rival oils, rising May stock outlook
JAKARTA: Malaysian palm oil futures opened lower on Wednesday, tracking weaker rival edible oils at Chicago and the prospect of May's palm oil stocks rising for the third consecutive month.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange lost RM12, or 0.31 per cent, to RM3,922 (US$924.56) a metric ton in early trade.
Dalian's most-active soyoil contract rose 0.1 per cent, while its palm oil contract declined 0.49 per cent. Soyoil prices on the Chicago Board of Trade were down 0.66 per cent.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Malaysia's palm oil inventories are projected to climb for a third consecutive month in May, driven by a modest recovery in production despite robust export demand, a Reuters survey showed on Wednesday.
India's palm oil imports in May surged to a six-month high, as lower inventories and the tropical oil's discount to rival soyoil and sunflower oil prompted refiners to increase purchases, according to five dealers.
Independent inspection company AmSpec Agri Malaysia said exports of Malaysian palm oil products for May rose 13.2 per cent, while cargo surveyor Intertek Testing Services saw a 17.9 per cent jump.
Oil prices edged lower in early Asian trade, weighed down by a loosening supply-demand balance following increasing OPEC+ output and lingering concerns over the global economic outlook due to tariff tensions.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm's currency of trade, strengthened 0.05 per cent against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.
Palm oil may retest resistance of RM3,968 per metric ton, a break above which could lead to a gain to RM3,998, Reuters technical analyst Wang Tao said.
Asian stocks inched higher and the dollar wobbled near six-week lows as traders braced for higher US duties on steel and aluminium, the latest chapter in the trade war saga that has rattled the markets for much of the year.
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