Palm oil ends slightly higher amid mixed signals, supported by uncertainty in the Strait of Hormuz

(1) On Tuesday, palm oil reversed early losses and closed slightly higher amid mixed signals. Kenanga Futures highlighted in their research report that although palm oil prices remain under pressure due to sluggish exports, ongoing uncertainty around the Hormuz Strait continues to support crude oil and biofuel prices.(2) The institution stated that the possibility of buying on dips after recent pullbacks provided additional support, but persistent concerns about rising production levels may limit upward momentum. The July contract at the Malaysian Derivatives Exchange rose by 3 ringgit to 4,537 ringgit per ton.(3) Kenanga set the July futures contract support and resistance levels at 4,500 ringgit and 4,650 ringgit per ton, respectively. Going forward, attention will focus on the transmission effect of Middle East tensions on crude oil prices, as well as the impact of the recovery speed of Southeast Asia’s major production areas on supply-demand balance.