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Palm rises from 14-month closing low, but set for weekly loss

September 9, 2022: Malaysian palm oil futures were set for a second straight weekly drop, even as prices rose on Friday after tumbling to a 14-month closing low in the previous session.

The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange gained 77 ringgit, or 2.17%, to 3,618 ringgit ($804.89) a tonne in early trade after three consecutive sessions of losses.

Palm has fallen 7.6% so far this week, as investors are worried that COVID-19-related restrictions in some parts of key buyer China would hit demand amid rising supply.

FUNDAMENTALS

* Traders are awaiting the Malaysian Palm Oil Board to release August supply and demand data on Monday. They have factored in polls indicating inventories expanding above 2 million tonnes for the first time in two years. PALM/POLL

* The Chinese city of Chengdu extended a lockdown for a majority of its more than 21 million residents on Thursday to prevent further transmission of COVID-19 while millions more in other parts of China were told to shun travel in upcoming holidays.

* Dalian's most-active soyoil contract DBYcv1 rose 0.4%, while its palm oil contract DCPcv1 fell 0.4%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 1%.

* 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 to 3,666 ringgit ($815.57) per tonne, before resuming its downtrend, as it has found support at 3,489 ringgit, Reuters technical analyst Wang Tao said. TECH/C

MARKET NEWS

* Asian shares crept higher as the dollar eased, with markets turning calmer after a record interest rate hike from the European Central Bank and hawkish comments from the U.S. Federal Reserve chairman reinforced bets of aggressive tightening ahead.

Reuters

Posted on:2022-09-09T09:23:02+05:00

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