MARKET DEVELOPMENT
VEGOILS-Palm falls for second day on higher output forecast
VEGOILS-Palm falls for second day on higher output forecast
07.04.2022 (www.nasdaq.com) - By Mei Mei Chu
KUALA LUMPUR, April 7 (Reuters) - Malaysian palm oil futures fell for a second straight session on Thursday, as industry group Malaysian Palm Oil Association (MPOA) forecast a bigger-than-expected rise in March production.
The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange slid 104 ringgit, or 1.76%, to 5,808 ringgit ($1,377.45) a tonne by the midday break.Investors are booking profits on expectation that demand will slow down as destination markets grapple with deep negative margins due to high prices, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
The MPOA estimated a 19% jump in March production to 1.35 million tonnes, higher than market estimates, and may put further selling pressure if stocks build, Bagani said.
Meanwhile, a Reuters poll had forecast on Monday that March production would rise 16.4% from the month before to 1.32 million tonnes, but it would be offset by stronger exports. End-month stocks were seen 0.5% higher at 1.53 million tonnes. PALM/POLL
The Malaysian Palm Oil Board is expected to release official data on April 11.
Oil prices rose from a three-week low touched in the previous session after consuming nations announced a huge release of oil from emergency reserves, with worries over tight supply still clouding the market outlook.O/R
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Dalian's most-active soyoil contract DBYcv1 rose 0.8%, while its palm oil contract DCPcv1 gained 0.4%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.01%.
Palm oil may fall into a range of 5,606 ringgit to 5,744 ringgit per tonne, as it could have completed a bounce from the April 1 low of 5,477 ringgit, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.2165 ringgit)
(Reporting by Mei Mei Chu; editing by Uttaresh.V and Subhranshu Sahu)