January 12, 2022: Malaysian palm oil futures firmed on Wednesday, extending a three-day rally as industry estimates pointed to a steep drop in production.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange gained 36 ringgit, or 0.71%, to 5,105 ringgit ($1,221.29) a tonne during early trade.
It had gained 0.53% overnight.
* The Southern Peninsula Palm Oil Millers' Association (SPPOMA) estimated production during Jan. 1-10 declined 32% from the same week in December, traders said on Tuesday.
* Indonesia is expecting higher than usual rainfall to continue this year, its weather agency BMKG said, although the amount will be lower than that recorded in 2021.
* Dalian's most-active soyoil contract gained 0.2%, while its palm oil contract rose 1.1%. Soyoil prices on the Chicago Board of Trade were up 0.2%.
* 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 test a support at 5,002 ringgit per tonne, a break below which could open the way to 4,927 ringgit, Reuters technical analyst Wang Tao said.
* Stocks and commodities rose in relief and the dollar hit a six-week low after Federal Reserve Chair Jerome Powell sounded less hawkish than expected in testimony to Congress, as he charts a path out of pandemic policy settings.
* Oil prices climbed after Powell signaled the central bank may raise rates more slowly than expected, which should support oil demand in the near term.