Palm rises for second day as stockpiles likely to shrink

June 08, 2022: Malaysian palm oil futures extended gains on Wednesday, supported by expectations of lower stockpiles ahead of palm oil board data later this week.

The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange gained 49 ringgit, or 0.75%, to 6,554 ringgit ($1,492.09) a tonne during early trade.

FUNDAMENTALS

* Indonesia Trade Minister Muhammad Lutfi said on Tuesday the government would bring down its combined maximum crude palm oil export and levy rate to $488 per tonne from $575 per tonne to encourage shipments.

* The Malaysian Palm Oil Board is due to release May supply and demand data on Friday. Inventories at May end are expected to drop 6% from the month before, as exports jumped while output shrank, according to a Reuters survey last week.

* Dalian's most-active soyoil contract DBYcv1 jumped 2.7%, while its palm oil contract DCPcv1 gained 2%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 1%.

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

* Palm oil looks neutral in a range of 6,423-6,577 ringgit per tonne, and an escape could suggest a direction, Reuters technical analyst Wang Tao said. TECH/C

MARKET NEWS

* World shares rebounded on Tuesday on the notion inflation may be peaking after Target Corp said it would offer deep discounts to clear inventory as consumers change their shopping habits, while Treasury yields fell after a surprise rate hike in Australia.

Reuters