Palm oil gains, set for third weekly rise

January 7, 2022: Malaysian palm oil futures rose on Friday, setting it on course for a third straight weekly gain, supported by concerns over adverse weather hurting the output of palm and rival soyoil.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange gained 43 ringgit, or 0.86%, to 5,028 ringgit ($1,195.72) a tonne in early trade.

It had gained 0.48% overnight and is set for a 7% weekly jump.

FUNDAMENTALS

The Southern Peninsula Palm Oil Millers' Association estimated production during Jan. 1-5 fell 45.8% from the same period in December, traders said on Thursday.

The market is eyeing industry data to assess the impact on production after flooding in recent weeks disrupted harvesting activities in several states.

Brazilian soybean prices have climbed past last year's highs, as hopes for another record harvest are dashed by hot and dry weather in southern states, agribusiness consultancy AgRural said.

Soyoil prices on the Chicago Board of Trade were up 0.2%. Dalian's most-active soyoil contract rose 0.6%, while its palm oil contract also gained 0.6%.

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 rise to 5,094 ringgit per tonne, as it has cleared a resistance at 5,001 ringgit, Reuters technical analyst Wang Tao said.

Reuters