VEGOILS-Palm oil slips as higher output, Black Sea deal extension weigh
KUALA LUMPUR, May 18 (Reuters) - Malaysian palm oil futures dropped on Thursday for a fourth consecutive session, as hopes of higher production and an extension of the Black Sea export deal raised the prospects of improved global supply.
The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange slid 17 ringgit, or 0.5%, to 3,417 ringgit ($770.46) a tonne during early trade, hovering near a two-week low hit in the previous session.
FUNDAMENTALS
"The absence of positive market-moving factors and expectations for a rise in May production are likely to cap a recovery attempt," a Kuala Lumpur-based trader said.
Indonesia, the world's largest palm oil exporter, on Wednesday urged importing countries to recognise and pay the premium for sustainably produced palm oil rather than boycotting the widely-used oil, whose production critics say has been linked to deforestation.
The Ukraine Black Sea grain deal has been extended for two more months, in what U.N. Secretary-General Antonio Guterres hailed as "good news for the world," a day before Russia could have quit the pact over obstacles to its grain and fertiliser exports.
Dalian's most-active soyoil contract DBYcv1 fell 0.5%, while its palm oil contract DCPcv1 slipped 0.03%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 1.12%.
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 retest a support zone of 3,344 ringgit to 3,363 ringgit per tonne, a break below could open the way towards 3,288 ringgit, Reuters technical analyst Wang Tao said.
MARKET NEWS
Wall Street rallied to a higher close on Wednesday, gathering momentum throughout the afternoon trading, and the dollar touched a six-week high as regional banks surged and negotiations in Washington over raising the debt ceiling progressed.
By: via Malaysian Palm Oil Council Russia
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