Palm pares losses as crude, rival oils gain

December 30, 2021: Malaysian palm oil futures pared the previous session's losses to gain on Thursday, buoyed by stronger crude and rival edible oils amid expectations for tighter supply.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose 21 ringgit, or 0.45%, to 4,716 ringgit ($1,131.34) a tonne during early trade.

It had gained 0.45% in overnight trade.

FUNDAMENTALS

Traders are awaiting industry estimates for December production, expecting lower output and drawdown on stocks.

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

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

Oil prices extended several consecutive days of gains, buoyed by data showing U.S. fuel demand holding up well despite soaring Omicron coronavirus infections and making palm a more attractive option as biodiesel feedstock.

Palm oil may retest a support at 4,676 ringgit per tonne, a break below which could cause a fall into 4,591-4,625 ringgit range, Reuters technical analyst Wang Tao said.

 Reuters