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Palm oil falls to six-week low as rival soyoil drops

Malaysian palm oil futures fell on Friday to a six-week low and were on course for a weekly decline, tracking losses in rival soyoil amid hopes of improving production, as traders shrugged off data that showed better March exports.

The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange slipped 142 ringgit, or 2.49%, to 5,563 ringgit ($1,322.01) a tonne by the midday break, its third daily decline.

For the week, the contract lost 7.7% so far.

“Higher palm production outlook, weakness in crude oil, losses on soybean oil on CBOT and squaring of positions ahead of March supply-and-demand estimate piled downward pressure on palm futures,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

Soyoil prices on the Chicago Board of Trade BOcv1 eased following a 3% overnight plunge as the U.S. Department of Agriculture (USDA) forecast U.S. 2022 soybean plantings at a record high.

Malaysia’s palm oil exports in March rose between 6.7% and 7.4% from prior month as shipments to China and India picked up, cargo surveyors said on Thursday.

Indonesian President Joko Widodo and Malaysian Prime Minister Ismail Sabri Yaakob witnessed on Friday the signing of an agreement to improve protection for migrant workers following a meeting between the leaders in Jakarta.

The agreement paves the way for Indonesia plantation workers to staff labour-starved Malaysian estates.

In China, Dalian’s most-active soyoil contract DBYcv1 fell 1%, while its palm oil contract DCPcv1 lost 3.3%.

Palm oil may test a support at 5,606 ringgit per tonne, a break below may cause a fall into 5,384-5,512 ringgit range, Reuters technical analyst Wang Tao said.
Source: Reuters (Reporting by Mei Mei Chu;)

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