Palm slides 4%, set for sharpest weekly drop since mid-March

June 24, 2022: Malaysian palm oil futures fell as much as 4% early on Friday, keeping them on course for their biggest weekly drop since mid-March, as a slump in rival soy oil prices and rising production outlook weighed on the market.

The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange slid 167 ringgit, or 3.52%, to 4,577 ringgit ($1,039.52) a tonne in early trade.

The contract has declined 16% so far this week, heading for its third straight weekly fall.

FUNDAMENTALS

* The Malaysian Palm Oil Association on Thursday estimated production during June 1-20 likely rose 15.9% from the month before, traders said.

* Officials from some G7 countries, including Germany and Britain, will push for temporary waivers on biofuels mandates to combat soaring food prices when leaders from the group of wealthy nations meet on Sunday, three people familiar with the matter told Reuters. Read full story

* Dalian's most-active soyoil contract DBYcv1 fell 2%, while its palm oil contract DCPcv1 slipped 3.1%.

* Soyoil prices on the Chicago Board of Trade BOcv1 extended losses after a 5.3% overnight decline, on concerns that a slowing global economy could limit demand Read full story

* 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 support at 4,588 ringgit, as it could have completed a bounce or its first leg, Reuters technical analyst Wang Tao said. TECH/C

MARKET NEWS

* Stocks and bonds were both headed for their first weekly gain in a month as investors wagered on central banks bringing inflation to heel, though growth fears dragged on commodities.