Palm oil climbs 2% on upswing in partial Feb exports

February 21, 2022: Malaysian palm oil futures jumped more than 2% on Monday, extending gains for a third consecutive session after a surge in February exports so far and tracking strength in Dalian oils.

The benchmark palm oil contract FCPOc3 for May delivery on the Bursa Malaysia Derivatives Exchange rose 128 ringgit, or 2.31%, to 5,667 ringgit ($1,354.45) a tonne during early trade.

FUNDAMENTALS

Exports of Malaysian palm oil products for Feb. 1-20 rose 24.9% to 825,193 tonnes from the same week in January, cargo surveyor Intertek Testing Services said on Sunday. 

In related oils, Chicago soybeans have been underpinned by concerns over yield losses in drought-hit South America, which may further tighten global supply. 

Indian traders have contracted to import a record 100,000 tonnes of soyoil from the United States because of limited supplies from South America, at a time when prices of rival palm oil are scaling record highs. 

Dalian's most-active soyoil contract DBYcv1 rose 2%, while its palm oil contract DCPcv1 jumped 2.2%. The Chicago Board of Trade were closed for a public holiday.

Palm oil may test a support at 5,484 ringgit per tonne, with a good chance of breaking below this level and falling into the 5,366-5,425 ringgit range, Reuters technical analyst Wang Tao said. 

MARKET NEWS

Asian share markets pared sharp early losses as a glimmer of hope emerged for a diplomatic solution to the Russian-Ukraine standoff, though there remained plenty of devil in the detail.

Oil prices gained more than $1 on rising jitters over the potential conflict between Russia and Ukraine, with the United States and European Union making clear Russia would face sanctions if it invaded its neighbour. 

Reuters