Palm oil prices flatten as Dalian oils outperform weak demand

Malaysian palm futures were mostly flat on Thursday, as Dalian oils, a stronger competitor, countered the weak demand in key markets such as India.

By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for September delivery fell by 4 ringgit or 0.1% to 4,096 Ringgit ($962.41) per metric ton.

Anilkumar bagani, research director at Mumbai-based vegetable oils broker Sunvin Group, stated that the market was trading in a sideways direction following the upward momentum in Chinese vegetable oil in Asian hours, and the persistent bullish trends in ultra-low-sulfur diesel (ULSD).

Bagani said that the lack of new buying support by destination markets, and the low demand for Indian products, capped the gains.

Dalian's soyoil contract was the most active, rising 1.44%. Palm oil contracts rose 0.52%. Chicago Board of Trade closed due to a public holiday.

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

Oil prices fell as investors hesitated before taking new positions following the mixed signals given by U.S. president Donald Trump on his country's possible involvement in the ongoing Israel/Iran conflict.

Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

Four trade sources confirmed that Indian refiners canceled orders for 65,000 tons of crude palm (CPO) due for delivery between July and September, following an unexpected surge in Malaysian benchmark prices.

The palm ringgit's trade currency, the dollar, has weakened by 0.19%, making it slightly cheaper for foreign buyers.

Technical analyst Wang Tao stated that palm oil is neutral between 4,072 and 4,113 ringgits per metric tonne, but an escape from this range could indicate a new direction.

(source: Reuters)