Palm Oil Rises on Soyoil Rally – Weak Crude Oil Caps Upside
🛢️ Palm Oil Rises on Soyoil Rally – Weak Crude Oil Caps Upside
Palm Oil Rises on Soyoil Rally – Weak Crude Oil Caps UpsidePalm 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.
🌍 Key Market Drivers
- Soyoil CorrelationThe 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 RinggitMalaysia’s currency weakness added export competitiveness for palm oil, further supporting demand.
- Crude Oil Weakness WeighsA 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 OilThe 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