Palm oil slumps over 8% to near one-year low

KUALA LUMPUR - Malaysian palm oil futures plunged more than 8% on Wednesday to a near one-year low, hit by anticipation of rising supplies amid a sell-off in crude and Dalian oils driven by recession fears.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange fell 348 ringgit, or 8.34% to 3,426 ringgit ($774.76) a tonne by 0307 GMT.

Palm extending losses for a fourth straight session, hitting their lowest since July 9, 2021.


FUNDAMENTALS
Malaysia's end-June palm oil inventories likely climbed 12.3% from the month before to their highest levels in seven months, as exports plunged following top producer Indonesia's return to the export market, a Reuters poll showed on Tuesday.

Dalian's most-active soyoil contract fell 6.5%, while its palm oil contract plunged 8.1%. Soyoil prices on the Chicago Board of Trade were down 0.9%.

Crude oil futures rose as investors piled back in after a 9% loss on Tuesday, shifting their focus again to supply concerns even as worries about a recession mounted.

Weaker crude makes palm a less attractive option for biodiesel feedstock.

Palm oil may test a support at 3,900 ringgit per tonne, a break below could open the way towards 3,592-3,782 ringgit range, Reuters technical analyst Wang Tao said.

MARKET NEWS
Asian stocks slipped and the dollar stood by a two-decade high on the euro, as investors' fears deepened that the continent is leading the world into recession, while oil and European equity futures attempted to steady after a slide.