Palm trades lower and is set to lose money for the week; Malaysia data is eyed
The market expects the Malaysian Palm Oil Board (MPOB) to release its data next week.
By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange fell 32 ringgit or 0.82% to 3,885 Ringgit ($897.23) per metric tonne.
This week, the contract has fallen by 2.31%.
A Kuala Lumpur based trader stated that "the futures appear to be trading within a range of 3,850-3.950 ringgit while waiting for next week's MPOB report."
Tuesday, September 10, is the date set for the MPOB to release its monthly palm-oil data.
A survey of 14 traders and planters revealed that Malaysian palm oil inventories were expected to be at a six-month-high of 1,86 million metric tonnes by the end of August due to low export demand.
Dalian's palm oil contract, which is the most active contract, rose 0.23% while Dalian's soyoil contract dropped 0.34%. Chicago Board of Trade fell 1.14%.
As they compete to gain a share in the global vegetable oil market, palm oil monitors price movements of related oils.
Indonesia, which is the world's largest palm oil exporter plans to reduce export duties in order to increase competitiveness and farmers' income.
The Malaysian Ringgit, the palm oil's trade currency, increased by 0.13% in value against the US dollar. Palm oil becomes less appealing to foreign currency holders when the ringgit is stronger.
Investors weighed a large U.S. crude inventory withdrawal, a delayed production increase by OPEC+ producers and mixed U.S. job data to determine the oil price trend.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
According to Wang Tao, technical analyst, palm oil could retest the support level of 3,864 Ringgit. A break below this would trigger a drop into the range 3,777-3,821 Ringgit.
(source: Reuters)
