Palm eases on weaker crude, stronger Dalian rival oils limit losses

March 28, 2022: Malaysian palm oil futures eased on Monday, weighed by a slump in crude prices after China announced a nine-day lockdown in Shanghai to carry out COVID-19 testing, although stronger prices of rival Dalian oils trimmed losses.

The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange fell 37 ringgit, or 0.61%, to 5,990 ringgit ($1,422.80) a tonne during early trade.

FUNDAMENTALS

* Key market China's financial hub of Shanghai said on Sunday all firms and factories would suspend manufacturing or have people work remotely in a two-stage lockdown over nine days, after it reported a new daily record for asymptomatic infections.

* Dalian's most-active soyoil contract DBYcv1 rose 1.3%, while its palm oil contract DCPcv1 gained 2%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.9%.

* Oil prices dropped about $4 as concerns over slower fuel demand in China grew, making palm a less attractive option for biodiesel feedstock. O/R

* Exports of Malaysian palm oil products for Mar. 1-25 fell 5% to 1,030,943 tonnes from the same week in February, cargo surveyor Societe Generale de Surveillance said on Sunday.

* The Malaysian Palm Oil Council (MPOC) forecast a small rise in 2022 global palm oil production, with Malaysia's output seen at 18.9 million tonnes and Indonesia's at 47.1 million tonnes.

* The Malaysian Palm Oil Board (MPOB) revised upwards its outlook for 2022 crude palm oil price to an average of 4,250 ringgit ($1,008.78) a tonne.

MARKET NEWS

* Asian shares and oil prices both slid as coronavirus lockdown in Shanghai looked set to hit global activity, while the yen extended its stomach-churning descent as the Bank of Japan acted to keep local yields near zero.

Reuters