Malaysian palm oil futures rise on export expectations

Malaysian palm oil futures saw a rise on Monday, driven by expectations of increased exports and higher crude oil prices. The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange increased by 0.31% to 3,897 ringgit per metric ton during early trading.

Exports of Malaysian palm oil for May 1-25 showed a growth of 2.4% to 3.1% compared to the previous month, as reported by cargo surveyors. Market participants were also awaiting the outcome of an OPEC+ meeting on June 2, where discussions on maintaining voluntary output cuts were expected.

Brent crude prices remained relatively stable in early Asian trading, experiencing a slight increase to $82.24 per barrel by 0305 GMT. This rise in crude oil prices made palm oil a more attractive option for biodiesel production. On the other hand, Dalian's soyoil contract dropped by 0.72%, while its palm oil contract decreased by 0.13%.

Palm oil prices are influenced by movements in related oils, as they compete in the global vegetable oils market. The strengthening of the ringgit, the currency used in palm oil trade, by 0.15% against the dollar, increased the cost of the commodity for buyers holding foreign currencies.

Technical analysis suggests that palm oil may test support at 3,865 ringgit per metric ton, with a potential further decline towards the range of 3,812 to 3,832 ringgit if the support level is breached.

The rise in Malaysian palm oil futures was driven by positive export data and the influence of crude oil prices. Market dynamics, including currency movements and global oil trends, continue to impact palm oil prices. Investors and traders are closely monitoring these factors to gauge the future direction of the market.