Malaysian Palm Oil Council Russia's Post

VEGOILS-Palm ticks up on weak production outlook

KUALA LUMPUR, Jan 12 (Reuters) - 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 FCPOc3 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.

FUNDAMENTALS
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 DBYcv1 gained 0.2%, while its palm oil contract DCPcv1 rose 1.1%. Soyoil prices on the Chicago Board of Trade BOcv1 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.

MARKET NEWS
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 signalled the central bank may raise rates more slowly than expected, which should support oil demand in the near term.
By: via Malaysian Palm Oil Council Russia