Palm falls on lower soyoil prices, weak exports

July 21, 2022: Malaysian palm oil futures slipped more than 2% on Thursday, giving up most of the gains from the previous session, weighed down by weaker rival edible oils and a bearish export outlook.

The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange slid 88 ringgit, or 2.24%, to 3,847 ringgit ($863.52) a tonne during early trade.

FUNDAMENTALS

Exports from Malaysia during July 1-20 fell between 2% and 9.6% from the month before, cargo surveyors said on Wednesday.

Demand for Malaysian palm oil is expected to remain weak due to more attractive pricing from rival Indonesia, which has scrapped its export levy for all palm oil products until end-August. 

Dalian's most-active soyoil contract DBYcv1 fell 1.7%, while its palm oil contract DCPcv1 lost 1.9%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.7%.

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

Oil prices fell for a second straight session, as demand concerns outweighed tight global supply after U.S. government data showed tepid gasoline demand during the peak summer driving season. 

A bullish target of 4,246 ringgit per tonne has been temporarily aborted for palm oil. It will only be resumed when the contract breaks 4,057 ringgit, Reuters technical analyst Wang Tao said. TECH/C

MARKET NEWS

Asian stocks inched lower and the dollar was firm on Thursday as looming central bank meetings in Europe and Japan and uncertainty over the supply of Russian gas kept traders on edge. 

Reuters