Palm falls, set for fourth montly drop on higher production outlook

August 30, 2022: Malaysian palm oil futures fell on Tuesday, setting the market on course for a fourth straight monthly decline due to rising production forecast.

The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange slid 64 ringgit, or 1.53%, to 4,110 ringgit ($916.80) a tonne during early trade.

For the month, the palm has fallen 4% so far.

Bursa Malaysia will be closed on Wednesday for a public holiday.

FUNDAMENTALS

* Malaysia's palm oil production is expected to increase in August compared to July, though the ongoing wet weather conditions and labour tension may limit upside performance, Refinitiv Agriculture Research said in a note late Monday.

* Indonesia extended an export levy waiver until Oct. 31 to maintain price stability and raised its crude palm oil reference price for Sept. 1-15 period, a senior minister said on Monday.

* Dalian's most-active soyoil contract DBYcv1 fell 1.1%, while its palm oil contract DCPcv1 dropped 1.7%. Soyoil prices on the Chicago Board of Trade BOcv1 slipped 1.1%.

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

* Palm oil may test a support at 4,085 ringgit per tonne, a break below may open the way towards 3,857 ringgit, Reuters technical analyst Wang Tao said.

Reuters