🛢️ Palm Oil Rises on Soyoil Rally – Weak Crude Oil Caps Upside
Palm Oil Rises on Soyoil Rally – Weak Crude Oil Caps Upside
Palm oil futures closed higher for a third session, supported by firmer soyoil and a weaker ringgit. However, gains were limited as crude oil prices turned sharply lower Thursday morning.
📊 Market Situation & Price Development
After returning from a long weekend, Malaysian palm oil futures rallied for a third consecutive session on Wednesday. The July 2025 contract rose by 34 MYR to 3,957 MYR/t, supported by stronger soyoil and currency effects.
In early Thursday trade, gains slowed as crude oil weakness and a sharp drop in soyoil triggered caution in vegetable oil markets.
| Contract | Price (MYR/t) | Daily Change | Trend |
|---|---|---|---|
| Jul 25 | 3,957 | +34 | ⬆️ |
| Aug 25 | 3,952 | +37 | ⬆️ |
| Sep 25 | 3,946 | +40 | ⬆️ |
🌍 Key Market Drivers
- Soyoil Correlation
The rally in soyoil, triggered by U.S. clean fuel tax credit proposals, helped lift palm oil midweek. However, Thursday morning saw soyoil falling over 5%, reversing part of the gain. - Weaker Ringgit
Malaysia’s currency weakness added export competitiveness for palm oil, further supporting demand. - Crude Oil Weakness Weighs
A surprise increase in U.S. crude inventories and renewed hopes for an Iran nuclear deal triggered a drop in crude oil, which weighed on the broader vegetable oil complex. - Spreads Favour Palm Oil
The soyoil premium over palm oil now exceeds USD 100/t for near-term contracts, boosting attractiveness of palm oil in high-volume export markets.
💼 Trading Strategy & Market Outlook
Palm oil’s short-term uptrend is intact but vulnerable to corrections if crude oil and soyoil remain under pressure.
Strategy:
– Buyers should proceed cautiously at current levels
– Monitor developments in U.S.–Iran negotiations and crude inventories
– Favour long positions on dips near MYR 3,880–3,900 for July
📈 3-Day Price Forecast (Jul 25 Contract)
| Date | Expected Range (MYR/t) | Forecast |
|---|---|---|
| May 16 | 3,920–3,980 | ➡️ Neutral |
| May 17 | 3,900–3,950 | ⬇️ Slight Risk |
| May 20 | 3,910–3,970 | ➡️ Stabilizing |
🌦️ 14-Day Weather Outlook – Palm Oil Regions
| Region | Trend | Notes |
|---|---|---|
| Malaysia | 🌦️ Scattered rain | Normal seasonal weather, no major disruptions |
| Indonesia | 🌧️ Moderate rain | Adequate for continued fruit development |
| India | ☀️ Dry & hot | Favours edible oil import flows |
| Middle East | ☀️ Hot | Potential increase in energy-linked palm demand |
