Palm extends gains on strength in rival oils

August 22, 2022: Malaysia's benchmark palm oil futures extended gains to a second session on Monday, tracking strength in rival vegetable oils.

The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange rose 3.79%, to 4,248 ringgit ($947.37) a tonne during early trade.

FUNDAMENTALS

Dalian's soyoil contract DBYv1 gained 2.10%, while its palm oil contract DCPv1 rose 3.43%. Soyoil prices on the Chicago Board of Trade BOc2 were up 0.41%.

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

Exports of Malaysian palm oil products for Aug. 1-20 rose 9.1% to 728,165 tonnes from the same period in July, cargo surveyor Intertek Testing Services said on Saturday, while independent inspection company AmSpec Agri Malaysia reported a 3.8% drop. 

Palm oil may test a resistance at 4,269 ringgit per tonne, as it has managed to hover above support at 4,085 ringgit per tonne, Reuters technical analyst Wang Tao said.

MARKET NEWS

Asian shares got off to a rocky start on Monday, while the dollar remained in demand amid concerns most major central banks are committed to raising interest rates no matter the risks to growth. 

Oil prices fell on Monday, ending three days of gains, on fears aggressive U.S. interest rate hikes may lead to a global economic slowdown and dent fuel demand. 

Chicago soybean futures ticked higher on Monday, supported by bargain-buying, although expectations of much-needed rain in parts of the U.S. Midwest limited gains. 

Reuters