Palm oil trades in a sideways fashion as Dalian oils and Chicago soyoil counter each other.

Malaysian palm futures were in a narrow range on Thursday as the strength of rival Dalian oils supported gains, while the weakness of crude oil and Chicago soybean oil limited them.

At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for September delivery gained 12 ringgit (0.3%), to 4,074 Ringgit ($965.17) per metric ton.

On Wednesday, the contract increased by 2.37%.

Anilkumar bagani, research director at Mumbai-based Sunvin Group, said that the crude palm oil futures market was trading sideways, as the bullish momentum of Chinese vegetable oils in Asian hours supported it. The gains were however capped by a decline in Chicago soyoil and energy prices, said Bagani.

Dalian's palm oil contract increased by 1.12%, while the most active soyoil contract rose by 0.28%. The Chicago Board of Trade's (CBOT), which trades soyoil, saw a decline of 0.93%.

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

Prices of oil fell, reversing gains made on Wednesday, due to concerns about weak U.S. Demand after data from the government showed that the United States had a large stockpile.

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

Palm's trade currency, the ringgit, has strengthened by 0.12% versus the dollar. This makes the product slightly more expensive to buyers who hold foreign currencies.

A projection analysis suggests that palm oil could extend gains up to 4,133 Ringgit per metric tonne, according to technical analyst Wang Tao.

(source: Reuters)