Palm oil rises for second session on stronger crude

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MG News | March 22, 2022 at 09:19 AM GMT+05:00

March 22, 2022: Malaysian palm oil futures rose on Tuesday, supported by higher crude oil prices, continuing a modest recovery for a second straight session after their biggest weekly drop since 1986.

The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange rose 1.6% to 5,865 ringgit a tonne in early trade.

FUNDAMENTALS

* Oil futures extended gains on Tuesday morning on news that some European Union members are considering imposing sanctions on Russian oil and as attacks on Saudi oil facilities sent jitters through the market.

* Stronger crude makes palm a more attractive option for biodiesel feedstock.

* Malaysia has maintained its April export tax for crude palm oil at 8%, a circular on the Malaysian Palm Oil Board website showed on Monday.

* Palm fell 16% last week after top producer Indonesia abandoned volume curbs on exports. The removal of the export restrictions would lift global palm oil supply, which may in turn curb international crude palm oil prices, analysts have said.

* Dalian's most-active soyoil contract DBYcv1 rose 1.34%, while its palm oil contract DCPcv1 gained 1.78%. Soyoil prices on the Chicago Board of Trade BOcv1 rose 0.88%.

* 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 at 5,606 ringgit per tonne, a break below which could cause a fall into 5,384-5,512 ringgit range, Reuters technical analyst Wang Tao said.

* Brazil had harvested 69% of the 2021/22 soybean crop as of Thursday, against 59% by the same time last year, agribusiness consultancy AgRural said on Monday.

* China's state planner said on Monday that it had asked major companies to release 1 million tonnes of state potash reserves.

MARKET NEWS

* Gains in banks, energy and mining stocks lifted Asian equities a little higher on Tuesday as investors braced for aggressive U.S. rate hikes and war disrupting oil supplies.

* Chicago wheat futures rose more than 2% on Tuesday, extending gains to a second session as expectations of a protracted Russia-Ukraine war heightened concerns over global supplies. Soybeans rose 1.3% while corn jumped about half a percent, adding to Monday's gains.

Reuters

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