Palm oil extends gains on higher crude, soybean oil

The contract has declined 1.6% so far this week after two consecutive weekly drop.

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Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
KUALA LUMPUR: Malaysian palm oil futures rose on Wednesday, tracking stronger crude and soybean oil prices and supported by bargain-hunting, although concerns over weakening global demand due to coronavirus-driven lockdowns capped the gains.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange climbed 21 ringgit, or 1.04%, to 2,041 ringgit ($468.33) per tonne by 0239 GMT, heading for a second straight day of gains.

The contract has declined 1.6% so far this week after two consecutive weekly drop.


FUNDAMENTALS

Oil prices climbed, trimming some of this week's steep losses after U.S. stockpiles rose less than expected and hopes grew for demand to pick up as some European countries and U.S. cities moved to ease coronavirus lockdowns.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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Dalian's most-active soyoil contract gained 0.6%, while its palm oil contract jumped 1.29%. Soyoil prices on the Chicago Board of Trade were up 0.35%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

A bearish target of 1,916 ringgit per tonne has been aborted for palm oil, and a bullish target zone of 2,072-2,107 ringgit has been established, Reuters technical analyst Wang Tao said.

MARKET NEWS
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Asian shares were cautiously higher as investors paused ahead of the U.S. Federal Reserve's policy decision while oil prices jumped on hopes demand will pick up as many countries lift some of the coronavirus-related restrictions.

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