Palm oil rises tracking overnight gains in soyoil

 February 17, 2022: Malaysian palm oil futures firmed on Thursday, lifted by an overnight rally in rival soyoil, although gains were held back by weaker crude prices and a survey signalling an improvement in the country's palm oil production.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange gained 26 ringgit, or 0.48%, to 5,459 ringgit ($1,305.51) a tonne during early trade.

FUNDAMENTALS

Malaysia has maintained its March export tax for crude palm oil at 8% and raised its reference price.

The Southern Peninsula Palm Oil Millers' Association (SPPOMA) estimated production in the world's second-largest producer during Feb. 1-15 rose 0.46% month-on-month, traders said on Wednesday.

Soyoil prices on the Chicago Board of Trade fell 0.4%, after jumping 2% overnight on concerns that forecast rain may be insufficient to avert further drought damage to crops in Argentina and southern Brazil.

Dalian's most-active soyoil contract rose 1.3%, while its palm oil contract gained 0.4%.

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

Palm oil may bounce again to resistance at 5,558 ringgit per tonne before retesting support at 5,425 ringgit, Reuters technical analyst Wang Tao said.

MARKET NEWS

Oil and gold rose on Wednesday after NATO and the United States said Russia was increasing its troop build-up near Ukraine, while a dovish reading of minutes from the last Federal Reserve meeting helped stocks close mostly flat on Wall Street.

Oil slid more than 2% in early Asian trade after both France and Iran said parties are closer to an agreement to salvage Iran's 2015 nuclear deal with world powers, offsetting ongoing concerns over the situation in Ukraine.

Reuters