Palm hits over two-month low

June 15, 2022: Malaysian palm oil futures fell on Wednesday to their lowest in more than two months, weighed by losses in rival oils and anticipation that demand will shift to Indonesia as the larger producer boosts shipment volumes.

The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange slid 122 ringgit, or 2.11%, to 5,614 ringgit ($1,271.29) a tonne during early trade.

Palm has fallen in five sessions out of six, touching its lowest since April 5 on Wednesday.

FUNDAMENTALS

Indonesia on Tuesday issued new regulations on palm oil export taxes, detailing the recently announced levy rate cut to accelerate shipments that have been slow to rebound after the ending of an export ban. 

Dalian's most-active soyoil contract DBYcv1 fell 0.94%, while its palm oil contract DCPcv1 lost 1.6%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.3%.

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

Palm oil looks neutral in a range of 5,702-5,892 ringgit per tonne, and an escape could suggest a direction, Reuters technical analyst Wang Tao said. 

MARKET NEWS

Asian markets were in a pensive mood on Wednesday as shell-shocked investors waited to see just how aggressive the Federal Reserve would be on rates, with many fearing drastic action would risk tipping the world into recession.

Reuters