Malaysian palm oil hit a one-week peak on Friday, tracking rival vegetable oils higher with support from a weak ringgit, but eased in light afternoon trade to levels nearer Thursday's close to end the week down slightly. The September palm oil contract on the Bursa Malaysia Derivatives exchange ended up 0.13 percent at 2,269 ringgit ($600.74) a tonne at close after trading in a 2,264-2,285 ringgit band. Earlier, prices hit their highest since June 25 at 2,285 ringgit. Prices closed down 0.35 percent this week.
"The market is ticking up but nothing much," said a palm trader with a foreign commodities brokerage in Malaysia. "The ringgit is weakening a bit, and bean oil is higher." "It is still range trading between 2,250 and 2,300," he added. "One day up, one day down as people look for new leads." Export and stocks data set to be released from next week could offer further direction, he added.
The Malaysian ringgit traded at 10-year lows, making benchmark palm cheaper for overseas buyers. Total traded volume for palm was 27,981 lots of 25 tonnes each, below the usual 35,000 lots. Signals are mixed for palm oil, as it has approached a resistance at 2,293 ringgit per tonne, said Reuters market analyst Wang Tao. In other vegetable oils, the US July soyoil contract rose 1.27 percent, while the most active January soybean oil contract on the Dalian Commodity Exchange was 0.6 percent higher.
Worries about Greece's debt default and its potential impact on European palm buying remain among palm traders. While Europe was fixated on Greece, a rout in Chinese stock markets continued. Chinese markets, which had risen as much as 110 percent from November to a peak in June, have collapsed since June 12, losing more than 20 percent.
"Should Greece exit from the euro zone, it would be negative for CPO prices as the economic uncertainties could weaken palm oil demand from the EU which accounts for 12 percent of global palm oil consumption," Ivy Ng, regional head of plantations research at CIMB Investment Bank said in a research note.