Overnight palm oil trading extended its strength, continuing to move higher on breakout momentum, also with reduced open interest as short positions accelerated their exit. In the first 20 days of July, Malaysian palm oil production edged lower month-on-month, with signs of output contraction emerging during the peak production season. This, combined with Indonesia's B50 policy tightening export expectations and concerns over El Nio-driven long-term production cuts, has somewhat eased supply pressures. On the demand side, stronger international crude oil prices have bolstered expectations for biodiesel feedstock demand, but physical spot transactions remained sluggish, with limited actual consumption uptake. In the short term, supply and demand factors are mixed, with the market exhibiting a firm but volatile bias. Yesterday, market news circulated about three new palm oil cargo purchases.