Palm oil firms as ringgit weakens; set for weekly first loss in three

April 22, 2022: Malaysian palm oil futures rose early Friday as the ringgit weakened, but the market is set for its first weekly decline in three weighed down by a drop in April exports so far.

The benchmark palm oil contract FCPOc3 for July delivery on the Bursa Malaysia Derivatives Exchange gained 71 ringgit, or 1.12%, to 6,384 ringgit ($1,483.62) a tonne in early trade.

For the week, the palm has declined 1.3% so far.

FUNDAMENTALS

* The ringgit MYR=, palm's currency of trade fell 0.35% against the dollar to its lowest since June 2020, making the commodity cheaper for holders of foreign currency.

* After huge rallies fed by blockbuster commodity price surges, the tide may be turning for currencies such as the Aussie dollar and Colombian peso as fears of a global growth slowdown take hold in markets.

* Exports of Malaysian palm oil products for April 1-20 fell 12.6% to 632,588 tonnes from the same week in March, cargo surveyor Societe Generale de Surveillance said late Thursday.

* Dalian's most-active soyoil contract DBYcv1 gained 1%, while its palm oil contract DCPcv1 rose 0.9%. Soyoil prices on the Chicago Board of Trade BOcv1 fell 0.4% after a seven-day winning streak.

* 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 resistance at 6,454 ringgit a tonne, a break above which could lead to a gain to 6,548 ringgit, Reuters technical analyst Wang Tao said.

MARKET NEWS

* Asian shares tumbled, as investors fretted about an increasingly aggressive rate-hike outlook for the United States as well as the fallout for the global economy from lockdowns in China.

Reuters