Malaysian palm oil range-bound ahead of MPOB data, export estimates

JAKARTA/ KUALA LUMPUR: Malaysian palm oil futures traded in a tight range on Tuesday, as traders awaited cargo surveyors’ export estimates and the Malaysia Palm Oil Board’s (MPOB) supply and demand data for further cues.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange lost 19 ringgit, or 0.48%, to 3,906 ringgit ($922.75) a metric ton by the midday break.

The contract was traded between 3,900 ringgit and 3,947 ringgit per ton. “Market remained rangebound with some profit taking ahead of MPOB data,” a Kuala Lumpur-based trader said. Malaysia’s palm oil stocks at the end of May rose to 1.99 million tons in a third consecutive month increase despite surging exports, data from the Malaysian Palm Oil Board (MPOB) showed during the midday break. Dalian’s most-active soyoil contract rose 0.13%, while its palm oil contract lost 0.17%. Soyoil prices on the Chicago Board of Trade were up 0.8%.

Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Cargo surveyors are expected to release Malaysian palm oil export estimates for May 1-10 later in the day. Oil prices edged up as market participants waited for the outcome of US-China talks that could pave the way for easing trade tensions and improve fuel demand. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, weakened 0.09% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

Palm oil remains neutral in a widened range of 3,889 ringgit to 3,961 ringgit per metric ton, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.