Palm oil firms on weak output

February 15, 2022: Malaysian palm oil futures ticked up on Tuesday, after ending at a record high in the previous session, underpinned by weak production and expectations of improving demand, although weakness in rival edible oils capped gains.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 11 ringgit, or 0.19%, to 5,678 ringgit ($1,356.75) a tonne during early trade.

It fell 0.36% during the overnight trade.

FUNDAMENTALS

Refinitiv Agriculture Research said the contract will edge up towards resistance levels at 5,690-5,710 ringgit this week, while support levels at 5,210-5,220 ringgit, underpinned by weak production, Indonesia's export regulations and India's import duty cut on crude palm oil.

Dalian's most-active soyoil contract rose 0.3%, while its palm oil contract gained 0.4%. Soyoil prices on the Chicago Board of Trade were down 0.2%.

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 resistance at 5,676 ringgit per tonne. It may hover below this level or retrace towards the range of 5,484 ringgit to 5,558 ringgit, Reuters technical analyst Wang Tao said.

MARKET NEWS

Asian share benchmarks dropped, as investors contemplated the implications of a potential imminent Russian invasion of Ukraine.

Oil prices fell as investors took profits from the previous day's rally to seven-year highs and as global stock markets slumped.

Reuters