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Palm drops 4% on Indonesian supply worries, weaker rival oils

August 02, 2022: Malaysian palm oil futures fell 4% on Tuesday, extending losses for a second day, as worries of more exports from top producer Indonesia and a heavy sell-off in rival edible oils weighed on the benchmark contract.

Palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange slid 163 ringgit, or 4.01%, to 3,897 ringgit ($880.58) during early trade.

FUNDAMENTALS

* Indonesia will retain its domestic sales requirement for palm oil to keep local cooking oil prices affordable, a senior official told Reuters on Monday, noting that a quota for export shipments would be relaxed further.

* Chicago Board of Trade soybean futures dropped to their lowest in almost one week after a U.S. government report showed a slight improvement in crop condition. GLOBAL-GRAINS/

* Soyoil prices on the Chicago Board of Trade BOcv1 were down 1.9%. Dalian's most-active soyoil contract DBYcv1 fell 1.7%, while its palm oil contract DCPcv1 slumped 3.3%.

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

* Oil prices edged lower as investors worried about global oil demand following weak manufacturing data in several countries, making palm a less attractive option for biodiesel feedstock. O/R

* Palm oil may fall to 3,857 ringgit per tonne, as it has broken a support at 4,085 ringgit, Reuters technical analyst Wang Tao said. TECH/C

MARKET NEWS

* Asia stocks continued a decline from Wall Street, and U.S. long-term Treasury yields sank to a four-month low, pulling the U.S. dollar down against the yen and other currencies as investors worried about the risk of a global recession.

Reuters

Posted on: 2022-08-02T09:21:49+05:00

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