Palm oil rises on high energy prices

January 27, 2022: Malaysian palm oil futures extended their gains to the third session on Thursday, after notching a new all-time high in overnight trade amid a rally in energy and grain markets.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 1.50% to 5,409 ringgit ($1,287.55) per tonne in early trade.

The contract recorded a 1.78% gain overnight as crude oil prices jumped on tight supply and rising geopolitical concern, but palm may see some profit-taking as rallies in rival oils were seen easing on Thursday.

FUNDAMENTALS

U.S. soybean futures hit their highest in seven months on Wednesday on technical buying and as soyoil futures rallied with energy markets and historically high palm oil prices.

Dalian's most-active soyoil contract rose 1.88%, while its palm oil contract gained 2.32%. Soyoil prices on the Chicago Board of Trade were down 0.61%.

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

Oil prices fell as investors cashed in profits from the 2% gains in the previous session after the U.S. Federal Reserve indicated an interest rate hike in March, leading to a technical correction in surging energy markets.

Crude oil prices affect palm oil as it is an option for biodiesel feedstock.

Palm oil may test a resistance at 5,484 ringgit per tonne, a break above could lead to a gain into 5,558-5,608 ringgit range, Reuters technical analyst Wang Tao said.

Reuters

 

Posted on: 2022-01-27T09:14:15+05:00

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