Palm little changed; heading for second weekly gain

The price of Malaysian palm oils futures was little changed on the Friday, but traders are waiting for export data to provide further clues.

By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange was up 9 Ringgit or 0.2% at 4,412 Ringgit ($1,046.24) per metric ton.

Futures are up 3.69% this week.

A Kuala Lumpur based trader stated that "Futures were trading sideways and tracking Dalian palm oils. We are waiting for export information for further guidance."

Dalian's palm oil contract, which is the most active contract, fell by 0.57% while soyoil prices dropped by 0.37%. Chicago Board of Trade soyoil prices were also down by 0.17%.

As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.

A leading trade group reported that India's palm-oil imports fell in July due to cancellations of contracts. Meanwhile, soyoil exports soared by a third year, driven by the competitive price and arrival of June consignments delayed, it said.

A circular posted on the Malaysian Palm Oil Board's website on Wednesday showed that Malaysia had raised its crude palm oil benchmark price for September, increasing the export duty to 10%.

Oil prices rose on Friday, reaching new one-week highs, after U.S. president Donald Trump warned that there would be "consequences", if Russia refused to sign a peace agreement with Ukraine, causing concern about the supply.

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

The palm's trade currency, the ringgit (0.17%), has weakened against the dollar. This makes the commodity more affordable for buyers who hold foreign currencies.

Technical analyst Wang Tao stated that palm oil could retest the resistance level of 4,481 Ringgit per metric tonne. A break above this would lead to gains up to 4,570 Ringgit.

(source: Reuters)