VEGOILS-Palm slips to two-week low on higher output expectations

16/05/2023 (Nasdaq), Kuala Lumpur - Malaysian palm oil futures slipped for a third straight session on Wednesday to hit their lowest in two weeks, weighed down by expectations of rising production amid lacklustre demand.

The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange fell 53 ringgit, or 1.53%, to 3,403 ringgit a tonne in early trade, hitting its lowest since May 3.

FUNDAMENTALS

* The Southern Peninsular Palm Oil Millers Association (SPPOMA) forecast production during May 1-15 to jump 16.72% from the same week in April, traders and analysts said.

* Demand has been slow and is expected to remain sluggish due to negative import margins in key importing countries like India and more attractive export taxes in bigger exporter Indonesia.

* India slashed the base import prices of crude palm oil and soyoil, the government said in a statement late on Monday.

* Indonesia lowered its crude palm oil reference price to $893.23 per tonne for the period of May 16-31, a trade ministry decree published on Monday showed, making its products more attractive than Malaysian palm oil.

* Dalian's most-active soyoil contract DBYcv1 lost 2.1%, while its palm oil contract DCPcv1 fell 1.5%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.4%.

* 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 drop further into a range of 3,288-3,344 ringgit per tonne, as it has broken a support at 3,418 ringgit, Reuters technical analyst Wang Tao said. TECH/C

MARKET NEWS

* Asian shares were subdued and the dollar hovered around a five-week peak as investors remained risk averse, with the U.S. debt ceiling talks and a mixed set of economic data weighing on sentiment. MKTS/GLOB

DATA/EVENTS (GMT, April)

0900 EU HICP Final MM, YY

1230 US Housing Starts Number

Source: Reuters

https://www.nasdaq.com/articles/vegoils-palm-slips-to-two-week-low-on-higher-output-expectations