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Palm oil gains for third day on expectations of weak January supply

Reuters Kuala Lumpur | Updated on February 08, 2021

Investors now eyeing January supply, demand data, February 1-10 export data, scheduled to be released on Wednesday

Malaysian palm oil futures rose for a third straight session on Monday, tracking strong arrival of soyoil, supported by expectations of weak January stocks and lower production.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 8 ringgit, or 0.24 per cent, at 3,383 ringgit ($832.84) a tonne during early trade.

Also read: Lack of announcement on edible oil mission disappoints sector

The contract fell 3.3 per cent last week.

Investors are now eyeing official January supply and demand data, as well as February 1-10 export data, scheduled to be released on Wednesday.

Fundamentals

Malaysia’s palm oil inventories at the end of January likely ticked up for the first time in four months, as a deep plunge in exports offset output which tumbled to a near five-year low, a Reuters survey showed on Friday.

Dalian’s most-active soyoil contract and its palmoil contract both gained 0.8 per cent. Soyoil prices on the Chicago Board of Trade were up 0.1 per cent.

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 retreat to 3,322 ringgit per tonne, as it failed to break a resistance at 3,422 ringgit, Reuters technical analyst Wang Tao said.

Market news

Asian shares hovered near record highs on Monday while oil edged closer to $60 a barrel on hopes a $1.9-trillion Covid-19 aid package will be passed by US lawmakers as soon as this month just as coronavirus vaccines are being rolled out globally.

Oil prices rose on Monday, with Brent futures nearing $60 a barrel, boosted by supply cuts among key producers and hopes for further US economic stimulus measures to boost demand.

Data/events ahead (GMT)

0700 Germany Industrial Output MM Dec ($1 = 4.0620 ringgit)

Published on February 08, 2021

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