Investing.com (29/12/2020) - KUALA LUMPUR, Dec 29 (Reuters) - Malaysian palm oil futures reversed early losses on Tuesday, inching up on stronger crude, but gains were capped by weaker rival soyoil ahead of talks between Argentina's striking workers and soy byproduct manufacturers that could resume supply.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose up 7 ringgit, or 0.2%, to 3,549 ringgit ($876.73) a tonne, rising for the fourth session in five.
Oil rose 1% on expectations for rising fuel demand, as the United States moved towards expanding its pandemic aid payments and with a final Brexit deal set to stabilize trade between Europe and the UK. O/R
Stronger futures make palm a more attractive option for biodiesel feedstock.
Palm futures were pressured by weakness in Dalian palm olein and soyoil futures, and a possible reversal in CBOT soyoil as the Argentina labour strike issue is expected to be resolved soon, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Argentina's CIARA-CEC chamber of soy byproduct manufacturers will meet on Tuesday with the two main unions representing oilseed workers to try and hammer out a 2021 compensation package. most-active soyoil contract DBYcv1 fell 1.5%, while its palm oil contract DCPcv1 slipped 1.7%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.4%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The market is waiting for Dec. 1 to 31 palm oil production and export data, as well as Malaysian Palm Oil Board December supply and demand data where end-stocks are expected to fall to 1.4 million tonnes, Bagani said.
Fitch Ratings expects crude palm oil prices to decline in 2021 on higher supply and assumes they will average $560/tonne over the year, despite some upside risk, such as a strong La Nina weather pattern. are indications that supply and inventory are picking up in top producer Indonesia and high prices are affecting demand from key constituents, Fitch said in its report. ($1 = 4.0480 ringgit)
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