FX.co ★ Palm Oil Retreats Further Yet Poised for Third Weekly Rise

Malaysian palm oil futures fell for a second straight session, trading just below MYR 4,600 per tonne, as weakness in rival vegetable oils on China’s Dalian Commodity Exchange weighed on sentiment. Additional pressure came from expectations of rising inventories, with Reuters projecting that May stockpiles increased for a second consecutive month. Cargo surveyor data showed exports declining by 8.8%–15.5% from April, highlighting subdued demand. Purchases by India, the world’s largest palm oil importer, rebounded modestly from April’s four-month low but remained below typical levels. Even so, futures were still on course for a third consecutive weekly gain, up about 0.7% so far, supported by a weaker ringgit that improves export competitiveness. Crude oil prices were also heading for solid weekly advances as talks between Washington and Tehran stalled, enhancing palm oil’s attractiveness as a biodiesel feedstock. Over the longer term, prices continued to draw support from dry weather across Asia and forecasts of a strong El Niño, which are fueling concerns over crop yields and the broader edible oil supply.