JAKARTA, Dec 23 (Reuters) – Malaysian palm oil futures extended gains to a third session on Thursday over expectations of lower December output, as torrential rains that began last week caused floods in eight states in Malaysia. The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose 1.0.8% to 4,496 ringgit ($1,069.71) by midday trade, having gained 3.73% over the past two days.
“For the time being market is supported by supply concern, and tracking rival oils movement,” a trader in Kuala Lumpur said, referring to floods in peninsular Malaysia.
On the Dalian Commodity Exchange, soyoil contract for May delivery rose 1.49%, while its palm oil contract gained 1.33%. Soybean oil prices on the Chicago Board of Trade for May delivery were down 0.16%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Oil prices rose on Thursday for a third straight day, underpinned by a weaker dollar on optimism about global growth, even as governments from Australia to Europe step up curbs to slow the spread of the Omicron coronavirus variant.
Stronger crude oil futures typically make palm a more attractive option for biodiesel feedstock. On the technical front, palm oil may test a resistance at 4,555 ringgit per tonne, a break above which could lead to a gain into 4,625-4,676 ringgit range, said Reuters technical analyst Wang Tao.