Palm hits six-week high

January 5, 2022: Malaysian palm oil futures rose for fourth straight session on Wednesday, hitting a six-week high, as surveys estimate a drop in December inventories and production.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange gained 44 ringgit, or 0.9%, to 4,958 ringgit ($1,183.29) a tonne during early trade, its highest since Nov. 25. It had gained 0.46% during overnight trade.

Fundamentals

Malaysia's palm oil inventories at the end of December likely shrunk 4.9% from the previous month to 1.73 million tonnes, their lowest in five months, a Reuters survey ahead of Malaysian Palm Oil Board data showed.

Production is pegged to fall 8.6% to 1.49 million tonnes, while exports are seen declining 4.9% to 1.4 million tonnes.

Dalian's most-active soyoil contract rose 1.5%, while its palm oil contract gained 1.9%. Soyoil prices on the Chicago Board of Trade were down 0.12%.

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

Palm oil faces a resistance at 4,948 ringgit per tonne, a break above could lead to a gain into the 4,994-5,069 ringgit range, Reuters technical analyst Wang Tao said.

Reuters