Palm rebounds on stronger U.S. soyoil, tight supply view

October 13, 2021: Malaysian palm oil futures edged up on Wednesday after two days of losses, helped by gains in rival Chicago soyoil and expectations of tight domestic supply.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained 8 ringgit, or 0.16%, to 4,863 ringgit ($1,169.83) a tonne during early trade. The contract posted its worst session in nearly a month on Tuesday.

FUNDAMENTALS

* Analysts expect Malaysia's October palm oil output to remain sluggish as the peak production season ends with lackluster yields, which will keep inventories tight.

* U.S. soybean and corn production will be bigger than previously expected, the U.S. Department of Agriculture (USDA said on Tuesday, knocking rival soybean futures to their lowest price of the year.

* Soyoil prices on the Chicago Board of Trade were up 0.8%, after declining 2.7% in the previous session. Dalian's most active soyoil contract fell 0.6%, while its palm oil contract slipped 0.4%.

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

* A bullish target range of 5,032-5,048 ringgit per tonne has been temporarily aborted for palm oil. It will resume when the contract rises above 4,909 ringgit, Reuters technical analyst Wang Tao said.

MARKET NEWS

* Asian shares were on edge on Wednesday as worries about soaring power prices fuelling inflation weighed on sentiment and drove expectations the United States would taper its emergency bond-buying programme, holding the dollar at a one-year high.

Reuters

Posted on: 2021-10-13T09:34:31+05:00

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