Palm falls on Dalian

The market is awaiting the release of key data by the Malaysian Palm Oil Board. The benchmark palm oil contract for September delivery on the Bursa Derivatives Exchange fell 35 ringgit (0.76%) to 4,559 Ringgit ($1,121.53) per metric ton at midday.

On the back of strong competition from?oils, and an increase in crude oil price, the contract has gained 2% this week. It is on track to record its first weekly gain since three.

A Kuala Lumpur-based trader reported that weakness across the commodity complex impacted the palm oil market on Friday.

The trader continued, "Market sentiment remained subdued as traders awaited MPOB's supply and demand report for June." The data will be released later today.

Dalian's palm oil contract, which is the most active contract in Dalian, fell by 0.97%. Soyoil prices at the Chicago Board of Trade rose 0.03%.

Palm oil follows the price movement of other edible oils as it competes to gain a share in the global vegetable oils markets. Oil prices were expected to rise and be set for a week-long gain as renewed supply disruption fears arose due to the escalating hostilities between Iran and the U.S.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The palm ringgit's currency of trade strengthened by 0.22% against a dollar, making it more expensive for buyers who hold foreign currencies.

Later in the day, cargo surveyors will release their estimates of exports for Malaysian palm oils products between July 1-10. Indonesia's mandate for increasing the biodiesel blend to 50% palm-oil based fuel will increase crude palm oils use from 15.2 million to 16.3 million metric tons. Technical analyst Wang Tao believes that palm oil could retrace to 4,528 ringgit a ton as the bottom of wave b.

(source: Reuters)