FX.co ★ Palm Oil Slips But Heads for Weekly Gain

Malaysian palm oil prices declined to approximately MYR 4,070 per tonne, reversing the gains achieved in the previous two sessions. This downturn was influenced by weaker soybean oil prices on the Chicago Board of Trade and Dalian markets, compounded by ongoing trade uncertainties as the July 9 tariff deadline approaches. Further exacerbating market sentiment, U.S. President Trump announced plans to notify countries of potential tariff changes starting July 4, excluding any extension of the current truce. Despite these challenges, the futures market is on course for a weekly increase of about 1.5%, recovering from the losses experienced last week. This rebound has been supported by stronger export activity, with cargo surveyors noting a 4.3%–4.7% rise in shipments for June. Additionally, Malaysia's palm oil inventories are anticipated to have decreased in June for the first time in four months, according to a Reuters forecast. On the production front, output is expected to see a short-term decline as palm trees undergo their seasonal rest period before likely recovering in the third quarter. Meanwhile, demand from India, a major buyer, is projected to remain robust, with June imports reaching an 11-month high driven by attractive pricing.