Palm oil prices are little changed in advance of MPOB data

Malaysian palm oil futures were traded in a narrow range on Wednesday, with traders awaiting the monthly supply and demand data from the Malaysian Palm Oil Board.

By midday, the benchmark contract for palm oil delivery in August on the Bursa Derivatives exchange gained 1 ringgit or 0.02% to 4,529 Ringgit ($1,115.52).

David Ng is a proprietary trader with Kuala 'Lumpur-based Iceberg X Sdn. Bhd. He said that the market had a cautious trading tone in anticipation of the release of the Malaysian Palm Oil Board Report later in the day. The weakness of soybean oil also added to the pressure.

Dalian's palm oil contract lost?0.18%, while the most active soyoil contract dropped 0.01%. Chicago Board of Trade soyoil prices were down by?0.19%. Palm oil follows the 'price movements of competing edible oils, as it competes to gain a share in the global vegetable oil markets. After the U.S. launched new attacks against Iran, and market data showed another large drawdown in U.S. oil stocks, oil prices rose, leaving behind a seven-week high reached in the previous session.

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

The ringgit (the currency used to trade palm oil) has weakened by 0.05% against dollar. This makes the commodity cheaper for buyers who hold foreign currencies. Indonesian trade officials were questioned by exporters of?coal and ferro-alloys who were concerned about the impact of the controversial new export control plan designed to extract more profit from Indonesia's natural resources. Technical analyst Wang Tao believes that palm oil may retest its support level of 4,492 ringgits per metric tonne, after a recent 'bounce' triggered by the support has ended at resistance around 4,538 ringsgits.

(source: Reuters)