Palm recovers from six-month low, weaker crude weighs

Palm recovers from six-month low
Palm recovers from six-month low

June 23, 2022: Malaysian palm oil futures rose on Thursday, lifted by bargain-buying after crashing to a six-month low in the previous session, but demand concerns and weakness in crude limited gains.

The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange gained 51 ringgit, or 1.13%, to 4,550 ringgit ($1,032.80) a tonne during early trade.

FUNDAMENTALS

Malaysia's exports during June 1-20 nosedived between 10% and 17% from the month before, according to cargo surveyors data, and demand is expected to remain subdued as larger producer Indonesia moves to boost its shipments.

Dalian's most-active soyoil contract DBYcv1 fell 4.4%, while its palm oil contract DCPcv1 slipped 4.5%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 2.1%.

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 2% in early trade, extending losses from the previous day, as investors worried that aggressive U.S. interest rate hikes could trigger a recession and dent fuel demand. O/R

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

Palm oil may test a resistance at 4,742 ringgit per tonne, a break above which could lead to a gain to 4,896 ringgit, Reuters technical analyst Wang Tao said. 

MARKET NEWS

Asian shares wobbled while commodity prices fell on Thursday as mounting worries about the risks of a global recession amid aggressive rate hikes by the Federal Reserve kept broad investor sentiment fragile.

Reuters

Posted on: 2022-06-23T09:07:56+05:00

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