Palm flat as traders wait for key data; on track for second weekly loss

KUALA LUMPUR: Malaysian palm oil futures were largely flat on Friday, as traders preferred to wait for next week’s demand and supply data from the palm oil board. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was unchanged at 4, 541 ringgit per ton by the midday break. The contract has declined 1. 03% so far this week and is on track for a second weekly fall. The market is largely in consolidation mode, awaiting the release of the Malaysian Palm Oil Board (MPOB) data, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari. MPOB is expected to release its monthly demand and supply data on Monday. “The market is pegging end-stocks to remain within market expectations of around 2. 3 to 2. 5 million metric tons, and any significant deviation from that range will likely dictate the market’s next directional move, ” he said. “We are also noticing that the price action is closely tracking crude oil movements, with little regard for the fundamentals. ” Keeping prices in check were the diverging prices of rival edible oils and crude oil, which palm tracks. Dalian’s most-active soyoil contract fell 1. 14%, while its palm oil contract shed 0. 87%. Soyoil prices on the Chicago Board of Trade were up 0. 65%. Palm oil competes with other edible oils for a share of the global vegetable oils market. Oil prices rose about 1% after renewed fighting broke out between the US and Iran, threatening a shaky ceasefire. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, weakened 0. 31% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies. Palm oil may bounce to 4, 563 ringgit per metric ton, as it is stabilising around a support at 4, 482 ringgit, Reuters technical analyst Wang Tao said.

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