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VEGOILS-Palm falls after 3-day rally, weaker ringgit caps losses

VEGOILS-Palm falls after 3-day rally, weaker ringgit caps losses

Reuters · 09/14/2022 02:22
VEGOILS-Palm falls after 3-day rally, weaker ringgit caps losses

Updates with midday prices

By Mei Mei Chu

- Malaysian palm oil futures fell on Wednesday as traders booked profits after a three-session rally, with concerns about a global economic slowdown also weighing on sentiment.

The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange had slid 87 ringgit, or 2.23%, to 3,811 ringgit ($842.40) a tonne by the midday break.

Asian shares tumbled, the dollar held firm and two-year Treasury yields hit a 15-year high, as a U.S. inflation report dashed hopes for a peak in inflation, fuelling bets rates may have to be raised higher for longer.

"This (U.S. inflation data) stoked fears of a quicker and higher interest rate hike to come, setting the equities into a sell-off and spilling into the commodities market," said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

The ringgit MYR=, palm's currency of trade, fell 0.4% to its lowest since 1998, making the commodity cheaper for holders of foreign currencies.

Malaysia is in the peak production season and palm oil board data showed a 9.7% month-on-month rise in August output. Analysts expect production to remain strong in September before tapering off in the fourth quarter.

Dalian's most-active soyoil contract DBYcv1 fell 0.2%, while its palm oil contract DCPcv1 gained 0.7%. Soyoil prices on the Chicago Board of Trade BOcv1 fell 0.04%.

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

The value of Colombia's palm oil exports may rise significantly to $800 million this year, thanks to high international prices and stable production, the palm growers association said on Tuesday.

Palm oil faces a strong resistance at 3,916 ringgit per tonne and it may hover below this level or retrace towards 3,686 ringgit, Reuters technical analyst Wang Tao said. TECH/C




($1 = 4.5240 ringgit)


(Reporting by Mei Mei Chu; Editing by Rashmi Aich and Subhranshu Sahu)

((Meifong.chu@thomsonreuters.com))

For a table on Malaysian physical palm oil prices, including refined oil, Reuters Terminal users can double click on or type OILS/MY01. * To view freight rates from Peninsula Malaysia/Sumatra to China, India, Pakistan and Rotterdam, please key in OILS/ASIA2 and press enter, or double click between the brackets.  * Reuters Terminal users can see cash and futures edible oil prices by double clicking on the codes in the brackets: To go to the  page in the same chain, hit F12. To go back, hit F11. Vegetable oils                       OILS/ASIA1 Malaysian palm oil exports           SGSPALM1   CBOT soyoil futures                  0#BO:      CBOT soybean futures                 0#S:       Indian solvent                       SOLVENT01  Dalian Commodity Exchange            DC/MENU   Dalian soyoil futures                0#DBY:   Dalian refined palm oil futures      0#DCP:   Zhengzhou rapeseed oil               0#COI:   European edible oil prices/trades    OILS/E