VEGOILS-Palm oil at 13-year high amid world edible oil supply concerns
06.05.2021 (www.nasdaq.com) - May 6 (Reuters) - Malaysian palm oil futures climbed 3.5% on Thursday to their highest since 2008, as tightening edible oil supplies buoyed world agricultural markets.
The benchmark palm oil contract FCPOc3 on the Bursa Malaysia Derivatives Exchange rose 143 ringgit, or 3.54%, to 4,187 ringgit ($1,015.52) a tonne by the end of the morning session. The contract had touched a 13-year high at 4,197 ringgit a tonne.
"Output in May is very crucial with lesser working days especially for harvesting. We are already grappling with manpower problems and it's going to be tougher in May," said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
"Demand is better, with palm being the cheapest vis-a-vis other competing oils. Thus, we anticipate prices to remain both defensive and firmer," he added.
Malaysia's crude palm oil contract for May delivery FCPOc1 jumped to record high of 4,704 ringgit ($1,140.92) a tonne on Thursday.
Palm oil is being supported by a rally in the global agriculture market, led by Chicago corn and soybean futures, which are trading close to multi-year highs.
Chicago corn futures rose up to 2% to hit their highest in more than eight years, as concerns over dry weather in Brazil and strong demand from animal feed producers buoyed the market. GRA/
Palm oil may break a resistance at 4,098 ringgit per tonne and rise into a range of 4,130-4,169 ringgit, Wang Tao, a Reuters market analyst for commodities technicals, said in a report. TECH/C
Argentina's Parana River, the grains superhighway that takes soy and corn from the Pampas farm belt to the world, has gotten so shallow that it has started "trimming" international shipments just as the country's export season gets underway.
"Rising prices of competing edible oils are supporting demand and will likely keep CPO prices firm in the near term," Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note.
Brazil's cereal exporter association Anec on Wednesday maintained the country would ship some 32 million tonnes of corn this year, 1.6 million tonnes less than in 2020.
Dalian's most-active soyoil contract DBYcv1 rose 4.9% while its palm oil contract DCPcv1 added 5.4%. Soyoil prices on the Chicago Board of Trade BOcv1 were 1.5% higher.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
($1 = 4.1230 ringgit)
(Reporting by Chen Lin; Editing by Subhranshu Sahu and Uttaresh.V)
((LinChen1@tr.com))