Palm oil rises supported by rival oils

February 18, 2022: Malaysian palm oil futures extended gains on Friday, supported by oil prices in the Dalian commodity exchange, although a survey signalling an improvement in the country's palm oil production and lower crude oil prices limited gains.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange gained 1.34%, to 5,581 ringgit ($1,334.21) a tonne during early trade.

FUNDAMENTALS

The Southern Peninsula Palm Oil Millers' Association (SPPOMA) estimated production in the world's second-largest producer during Feb. 1-15 rose 0.46% month-on-month, traders said on Wednesday.

Dalian's most-active soyoil contract rose 0.46%, while its palm oil contract gained 1.88%. Meanwhile, soyoil prices on the Chicago Board of Trade fell 0.24%.

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

Palm oil FCPOc3 may test a resistance at 5,608 ringgit per tonne, a break above which could lead to a gain to 5,676 ringgit.

MARKET NEWS

U.S. stock futures bounced on Friday and selling pressure eased in Asian share markets after the U.S. secretary of state agreed to a meeting with Russia's foreign minister, raising hopes for a diplomatic solution to the East-West standoff over Ukraine.

Oil prices retreated on Friday after wild swings during the week, as the prospect of extra supply from Iran returning to the market outweighed fears of a possible Russian invasion of Ukraine, which could disrupt supply.

 Reuters