VEGOILS - Palm extends its gain on the back of strong export data and Indonesia B50 support

Malaysian palm futures were up for the?second consecutive session on Monday, supported by cargo surveyors data that showed robust exports and Indonesia's mandatory blend of biodiesel.

By midday, the benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange had gained 14 ringgit or 0.31% to 4,582 Ringgit ($1,128) per metric tonne.

Paramalingam Supramaniam is the director of brokerage Pelindung Bestari. He said that the market was supported by a strong export in June, and by Indonesia's mandatory minimum including policy under B50.

On July 1, Indonesia will launch its B50 Biodiesel Programme, which lends 50% palm oil-based biomass with 50% conventional diesel.

Exports of palm oil products from Malaysia rose between 10.6% to 11.1% in the month preceding, according to cargo surveyors. On Tuesday, they are expected to publish their estimates for the entire month.

East Malaysia still has lower production, but Peninsular Malaysia also shows a stronger recovery than expected. Supramaniam stated that the weather conditions are still benign and will likely remain this way until the third quarter.

Supramaniam expects the prices to remain "largely rangebound" at least until July 10, when the Malaysian Palm Oil Board will release its report.

Dalian's most active soyoil contract grew by 0.62% while palm oil gained 1.01%. Chicago Board of Trade soyoil prices were up by 0.27%.

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

The price of oil rose after days of titt-for-tat attacks by the U.S.

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

The palm ringgit's currency has strengthened by 0.59% against US dollars, increasing the price of the commodity for those who hold foreign currencies.

Technical analyst Wang Tao stated that palm oil could retrace to a range between $4,517 and $4,538 per ton, before it resumes its 'rise.

1 Please enter the freight rates from Peninsula Malaysia/Sumatra for China, India and Pakistan, and Rotterdam. You can also double-click between the brackets. Double-clicking on the codes between the brackets will show you the cash and future edible oil prices. To move to the next page, press F12. To go back, hit F11. 1

(source: Reuters)