Markets

Palm extends three-day rally on tight supply, stronger rival oils

  • Soyoil prices on the Chicago Board of Trade were up 0.2%. Dalian's most-active soyoil contract rose 1.8%, while its palm oil contract gained 2.3%.
Published February 24, 2021

KUALA LUMPUR: Malaysian palm oil futures climbed for a fourth day on Wednesday, supported by a tight supply and tracking a rally in rival Dalian and Chicago Board of Trade soyoil.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange rose 30 ringgit, or 0.82%, to 3,706 ringgit ($917.78) a tonne by the midday break.

Palm contract earlier rose as much as 1.9% to hit its highest since Jan. 13.

"The Malaysian Palm Oil Association showed a recovery of supply compared to last month, but improving exports in February will continue to keep Malaysia's stocks at a historical low level," a Singapore-based trader said.

Malaysia's palm oil exports during Feb. 1 to 20 rose between 10% and 28% from the same period in January, according to data from cargo surveyors.

The market is now awaiting Feb. 1 to 25 cargo surveyor export data due on Thursday for more direction.

Hike in overnight soybean complex and Dalian edible oils also supported palm oil prices, the trader said.

Soyoil prices on the Chicago Board of Trade were up 0.2%. Dalian's most-active soyoil contract rose 1.8%, while its palm oil contract gained 2.3%.

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 resistance at 3,752 ringgit per tonne, a break above which could lead to a gain to 3,834 ringgit, Reuters technical analyst Wang Tao said.

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