VEGOILS-Palm oil reverses early gains; set for fourth weekly rise on supply concerns
KUALA LUMPUR, July 21 (Reuters) – Malaysian palm oil futures reversed early gains on Friday due to profit-taking, but the contract is set for a fourth weekly rise on robust July exports so far and concerns over Black Sea supplies.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange lost 6 ringgit, or 0.15%, to 4,040 ringgit ($887.62) a metric ton by the midday break, after rising 0.8% earlier in the day.
Prices failed to sustain early gains due to profit-taking ahead of the weekend and coupled with weakness in rival oilseeds, a Kuala Lumpur-based trader said.
For the week, palm has risen 4.1% so far.
Malaysia’s palm oil exports during July 1-20 rose 19% from the month before, cargo surveyor Intertek Testing Services said on Thursday. Another cargo surveyor, AmSpec Agri Malaysia said exports from the world’s second largest producer rose 10.1% during the same period.
Russia jolted world grain markets with an escalation in the Black Sea, mounting a third straight night of air strikes on Ukrainian ports and issuing a threat against Ukraine-bound vessels to which Kyiv responded in kind.
The halt on the Black Sea grain deal has created new market uncertainties and lifted corn, wheat and soybean futures, the trader said.
“We have to closely monitor both nations, especially Russia for any fresh news,” she added.
Dalian’s most-active soyoil contract DBYcv1 eased 0.9%, while its palm oil contract DCPcv1 lost 0.3%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.7%.
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 end its rally in a resistance zone of 4,103-4,122 ringgit per metric ton, as suggested by a projection analysis, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.5515 ringgit)
(Reporting by Mei Mei Chu; Editing by Janane Venkatraman and Rashmi Aich)
