VEGOILS-Palm extends losses on weak soy prices, export data
22.07.202 (www.nasdaq.com) - By Mei Mei Chu
KUALA LUMPUR, July 22 (Reuters) - Malaysian palm oil futures fell on Thursday for a second straight session, tracking weakness in rival soyoil ahead of the country's export tax announcement, with weaker exports this month so far further weighing on sentiment.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange slid 63 ringgit, or 1.52%, to 4,086 ringgit ($967.22) a tonne by the midday break.
The market is awaiting Malaysia to announce its crude palm oil export tax for August, with hopes that the world's second-largest exporter will lower its reference price, a Kuala Lumpur-based trader said.
"More selling is expected as soybean complex is showing more weakness."
Exports of Malaysian palm oil products for July 1-20 fell 9.6% to 869,542 tonnes compared with the same period in June as shipments to India and China declined, according to data from cargo surveyor Societe Generale de Surveillance on Wednesday.
Dalian's most-active soyoil contract DBYcv1 fell 1.5%, while its palm oil contract DCPcv1 eased 1.3%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 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 after an unexpected rise in U.S. crude oil inventories and as rising COVID-19 infections threaten demand, making palm a less attractive option for biodiesel feedstock. O/R
Palm oil may break a resistance at 4,164 ringgit and rise to 4,260 ringgit per tonne, as it is yet to fulfil this target, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.2245 ringgit)
(Reporting by Mei Mei Chu; editing by Vinay Dwivedi and Rashmi Aich)
((Meifong.chu@thomsonreuters.com))