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Palm extends losses for sixth sessions as market awaits July estimates

Malaysian palm oil futures slid for the sixth session on Tuesday to its lowest closing in nearly three weeks as market participants await July supply and demand estimates.

The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange lost 0.23% to 3,869 ringgit ($856.54) per tonne on Tuesday.

“Looks like market is looking to breath. After strong exports in June and July, exports from Malaysia will be low in August. Importers likely to have sufficient stocks,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

Palm oil exports from Malaysia in July rose 7.8% from the month before, according to AmSpec Agri Malaysia, while cargo surveyor Intertek Testing Services (ITS) estimated a 14% rise for the same period.

Dalian’s most-active soyoil contract DBYcv1 were up 0.52%, while its palm oil contract DCPcv1 gained 0.77%. Soyoil prices on the Chicago Board of Trade BOc2 rose 0.30%.

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

Indonesia has set its crude palm oil (CPO) reference price at $826.48 per metric tonne for Aug. 1-15, keeping the export tax and levy unchanged from the previous period.

Palm oil FCPOc3 may fall to 3,778 ringgit per metric ton, as it has broken a support of 3,861 ringgit, Reuters technical analyst Wang Tao said.

Malaysia’s benchmark crude palm oil prices will trade at 3,700-4,200 ringgit a metric ton in the second half of 2023, and will remain supported in the long term, state agency Malaysian Palm Oil Council (MPOC) said on Tuesday.
Source: Reuters (Reporting by Bernadette Christina Munthe; Editing by Subhranshu Sahu, Nivedita Bhattacharjee and Shinjini Ganguli)

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