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Palm oil drops for fifth day on recession risks

July 7, 2022: Malaysian palm oil futures extended losses for the fifth session on Thursday, as persistent concerns over a global recession hammered the market.

The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange slid 64 ringgit, or 1.58%, to 3,991 ringgit ($902.12) a tonne during early trade.

It declined 3.9% overnight, also weighed by demand concerns as rival and top producer Indonesia, which is facing soaring inventories, raised its export volumes. 

FUNDAMENTALS

Dalian's most-active soyoil contract DBYcv1 fell 0.7%, while its palm oil contract DCPcv1 slumped 2.4%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 1.5%.

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

Brent crude futures extended declines for a third session on Thursday, slipping under $100 a barrel, as fears of a potential global recession spurred concerns about oil demand. 

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

Palm oil may retest a support at 3,782 ringgit per tonne, a break below could open the way towards 3,592 ringgit, Reuters technical analyst Wang Tao said. 

MARKET NEWS

Wall Street ticked upward while oil continued to slide on Wednesday, as investors juggled concerns over inflation versus a recession after Federal Reserve minutes showed officials rallied around a large rate hike at their June meeting. 

Reuters

Posted on: 2022-07-07T09:17:17+05:00

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