VEGOILS - Palm trades slow on the back of weaker oil rivals; set to a loss for the week
Malaysian palm oils futures continued to fall on Friday as they tracked the weakness of rival vegetable oil at Chicago and Dalian, and were expected to record a loss for the week.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for February delivery had fallen 35 ringgit or 0.71% to 4,886 Ringgit ($1,097.98).
This week, the contract has dropped 4.72%.
The futures appear to be trading in a range, waiting for a new lead. A Kuala Lumpur based trader stated that he was waiting to see the Dalian exchange's behavior before deciding on a direction.
Chicago Board of Trade Soyoil fell 0.61%. Dalian's soyoil contract, which is the most active contract in Dalian, fell by 0.97% while palm oil gained by 0.44%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
The Solvent Extractors' Association of India reported that India's imports of palm oil in November decreased by 0.4% compared to October, reaching 841.993 metric tons.
Intertek Testing Services, a cargo surveyor, predicted that exports of palm oil products from Malaysia for the period Dec. 1-10 would have increased by 3.9%. AmSpec Agri Malaysia, an independent inspection company in Malaysia had forecasted a rise of 1.1%.
Oil prices fell as investors reacted to a forecast for ample supply, shrugged off expectations that Chinese stimulus measures would increase demand in the coming year and waited for another Federal Reserve rate cut next Monday.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
Technical analyst Wang Tao stated that palm oil was expected to reach resistance at 4,961 Ringgit per metric tonne. A break above this level could lead to 5,045 Ringgit.
(source: Reuters)
