VEGOILS - Palm flat as traders await key data, on course for second weekly loss

Malaysian palm oil futures were mostly flat on Friday as traders waited for the next week's data from the palm oil board.

By midday, the benchmark palm oil contract for July delivery at the Bursa Derivatives Exchange remained unchanged at 4,541 Ringgit per ton.

The contract is down 1.03% this week, and on course for a second consecutive weekly decline.

Paramalingam Supramaniam said that the market was largely consolidating, as it awaited the release of data from the Malaysian Palm Oil Board.

MPOB will release its monthly data on demand and supply on Monday.

He said that the market expects end-stocks of 2.3 to 2.5 million metric tonnes, and any deviations from this range will likely determine what direction it moves in next.

We also notice that price movements closely track crude oil, without much regard for fundamentals."

Palm tracks the prices of crude oil and edible oils that are rivals.

Dalian's palm oil contract, which is the most active contract, fell 0.87% while soyoil prices dropped 1.14%. Chicago Board of Trade soyoil prices were up 0.65%.

Palm oil competes with other edible oils to gain a share in the global "vegetable oil" market. After renewed fighting between the U.S.A. and Iran threatened a "shaky ceasefire", oil prices rose by about 1%.

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

The ringgit (palm's trade currency) fell 0.31% to the dollar. This made the commodity a little cheaper for buyers who hold foreign currencies. Technical analyst Wang Tao believes that palm oil could rise to 4,563 ringgit a metric ton as it stabilises around the support level of 4,482 rings.

(source: Reuters)