Palm set to gain for fourth day as rival oils strengthen

July 29, 2022: Malaysian palm oil futures rose on Friday, lifted by stronger rival oils in the Dalian Commodity Exchange, with the benchmark contract heading for second straight weekly gain.

The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange rose 3.46% to 4,094 ringgit ($920.62) per tonne during early trade, heading for its best day in more than two weeks.

FUNDAMENTALS

Dalian's most-active soyoil contract DBYcv1 rose 3.50%, while its palm oil contract DCPcv1 gained 4.61%. Soyoil prices on the Chicago Board of Trade BOcv1 are down 0.08%.

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

Chicago soybeans ticked lower but the market is poised for its biggest weekly rise in more than a year as forecasts of hot and dry weather in the U.S. Midwest-raised concerns over supplies.

Oil prices gained about $1, lifted by supply concerns and a weaker U.S. dollar as attention turns to what OPEC and allies including Russia agreed at a meeting next week marking the end of their 2020 output reduction pact. O/R

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Indonesia has agreed to lift a freeze on sending its migrant workers to Malaysia effective August 1. The entry of migrant workers will help Malaysia - the world's second-largest palm oil producer and a key link in the global supply chain - ease a shortage of some 1.2 million workers. 

Palm oil FCPOc3 may test a resistance of 4,085 ringgit per tonne, a break above which could lead to a gain to 4,269 ringgit. 

MARKET NEWS

Asian stocks tracked a late rally on Wall Street, as markets focused on a possible slowdown in the pace of rate hikes rather than a U.S. recession after data showed its economy shrinking for a second straight quarter. 

Reuters