VEGOILS-Palm oil firms on higher crude prices, Indonesia's plan to raise biofuel mandate
18/12/2022(Nasdaq), Kuala Lumpur - Malaysian palm oil futures rose on Monday, underpinned by higher crude prices and Indonesia's plan to raise its biofuel mandate, although concerns over another COVID-19 outbreak in China capped gains.
The benchmark palm oil contract FCPOc3 for March delivery on the Bursa Malaysia Derivatives Exchange gained 43 ringgit, or 1.1%, to 3,961 ringgit ($897.17) a tonne during early trade.
It had lost 1.9% last week.
FUNDAMENTALS
* Malaysian palm oil is expected to trade at between 3,500 and 5,000 ringgit per tonne from now until the end of May as stocks in the commodity's top two producer countries deplete, leading industry analyst Dorab Mistry said on Saturday.
* Top producer Indonesia on Friday said it is set to raise mandatory biodiesel blending to 35% starting January 1, 2023, to reduce fuel imports amid high global energy prices and to shift to cleaner energy.
* China is in the first of an expected three waves of COVID cases this winter, with further waves expected as people return en masse to their home areas for the Lunar New Year holiday next month, according to the country's chief epidemiologist, Wu Zunyou.
* Dalian's most-active soyoil contract DBYcv1 fell 1.5%, while its palm oil contract DCPcv1 eased 0.6%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.1%.
* Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
* Palm oil looks neutral in a range of 3,861-3,945 ringgit per tonne, and an escape could suggest a direction, Reuters technical analyst Wang Tao said. TECH/C