Palm oil set for 10% weekly jump

February 25, 2022: Malaysian palm oil futures fell more than 5% on Friday following a bout of profit-taking after a record closing in the previous session, but the contract was still set for a weekly surge after Russia's attack on Ukraine set off global supply jitters.

The benchmark palm oil contract FCPOc3 for May delivery on the Bursa Malaysia Derivatives Exchange slid 338 ringgit, or 5.24%, to 6,115 ringgit ($1,457.34) a tonne during early trade.

It fell 1.98% overnight, ending a breathless six-day rally.

For the week, the palm has gained 10.5% so far, its biggest weekly climb since May 7, 2021.

FUNDAMENTALS

Ukrainian President Volodymyr Zelenskiy vowed on Friday to stay in Kyiv as his troops battled Russian invaders who are advancing toward the capital in the biggest attack on a European state since World War Two.

Ukraine's military has suspended commercial shipping at its ports, an adviser to the Ukrainian president's chief of staff said, stoking fear of supply disruption from leading grain and oilseeds exporters. 

Dalian's most-active soyoil contract DBYcv1 fell 0.7%, while its palm oil contract DCPcv1 gained 0.3%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.5%.

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 resistance at 6,488 ringgit per tonne, a break above which could lead to a gain into 6,562-6,680 ringgit range, Reuters technical analyst Wang Tao said. 

MARKET NEWS

Asian shares regained ground, following Wall Street's overnight lead as U.S. President Joe Biden, hit back at Russia with harsh sanctions after it attacked Ukraine. 

Oil prices soared nearly $2 per barrel in early trade as the Ukraine attacks continued to inflame global supply concerns as markets brace for the impact of trade sanctions on major crude exporters Russia. 

Reuters