Palm drops over 2% in line with losses in crude, rival oils

June 22, 2022: Malaysian palm oil futures fell over 2% on Wednesday, hovering near a more than five-month low hit in the previous session, as the market tracked deep losses in crude and rival edible oils.

The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange slid 112 ringgit, or 2.25%, to 4,868 ringgit ($1,106.36) a tonne in early trade, down for a fifth session in six.

FUNDAMENTALS

* Indonesia, the world's top palm oil exporter, has issued export permits for 894,481 tonnes of palm oil products under its Domestic Market Obligation (DMO) scheme as of Wednesday, Trade Ministry official Oke Nurwan said.

* Malaysia will abolish subsidies for certain cooking oil products from July 1, its government announced on Tuesday, in what it said was a move to ensure domestic supply and stabilise prices. Read full story

* Dalian's most-active soyoil contract DBYcv1 fell 2.3%, while its palm oil contract DCPcv1 slipped 1.3%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 1.2%.

* Palm oil is affected by price movements in related oils, as they compete for a share in the global vegetable oils market.

* Oil prices skidded $4 amid a push by U.S. President Joe Biden to bring down soaring fuel costs, including pressure on major U.S. firms to help ease the pain for drivers during the country's peak summer demand.

* Palm oil may break a support at 4,896 ringgit per tonne and fall towards 4,588 ringgit, Reuters technical analyst Wang Tao said.

MARKET NEWS

* Asian stocks slipped in volatile trade, failing to extend an overnight Wall Street rally on persistent worries about interest rates and inflation, while the Japanese yen hit a fresh 24-year low against the dollar.

Reuters