Palm oil set for 2nd weekly gain on higher May export

June 3, 2022: Malaysian palm oil futures edged higher on Friday, headed for their second weekly gain, supported by output concern due to a severe labor crunch after Indonesia barred a group of its plantation workers from traveling to Malaysia and strong May export data.

The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange gained 152 ringgit, or 2.35%, to 6,620 ringgit ($1,510.04) a tonne in early trade.

FUNDAMENTALS

Exports of Malaysian palm oil products for May rose 20.5% to 1,329,186 tonnes from 1,103,093 tonnes shipped during April, cargo surveyor Societe Generale de Surveillance said on Thursday. 

Indonesia barred a group of its plantation workers from traveling to Malaysia because recruiters did not follow proper procedures and most of the workers did not have the right visa, the head of the country's migrant worker protection agency said. 

As of early Thursday, Indonesia has issued export permits for 179,464 tonnes of palm oil as of June 2, a senior trade ministry official said after a ban on shipments was lifted last week. 

State agency the Malaysian Palm Oil Council (MPOC) lowered its production outlook on Wednesday for the world's second-largest producer and pegged prices to remain above 6,000 ringgit ($1,367.37) a tonne this year. 

Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.17%. Dalian Commodity Exchange was closed on Friday for Dragon Boat Festival holidays.

Palm oil FCPOc3 may break a resistance at 6,577 ringgit per tonne, and rise into a range of 6,682-6,731 ringgit, Reuters technical analyst Wang Tao said. 

MARKET NEWS

Asian shares rose broadly on Friday morning after softer-than-expected U.S. employment data raised the possibility of the Federal Reserve turning less aggressive on its policy tightening stance in the coming months.

Reuters