Malaysian palm oil futures were almost flat on Friday, as some traders booked profits from a nine-month high notched in the previous session, while strong exports and soybean supply fears in drought-hit South America supported prices. Palm oil recorded four straight sessions of gains this week on upbeat price forecasts at a recent industry conference and positive news that lifted the global economic outlook. Edible oil futures are trading almost 7 percent higher this year.
"The market's trading in a tight range today. There's some profit-taking as the market has been up almost 200 ringgit since the palm oil conference (last week)," said a trader with a foreign commodities brokerage in Malaysia. Benchmark June palm oil futures on the Bursa Malaysia Derivatives Exchange gained one ringgit to close at 3,398 ringgit ($1,112) per tonne. Prices touched a new peak of 3,418 ringgit, a level not seen since last June.
Traded volumes on Friday stood at 24,583 lots of 25 tonnes each, slightly less than the usual 25,000 lots. On the technicals front, Reuters market analyst Wang Tao said palm oil was struggling around a resistance at 3,398 ringgit per tonne. Demand prospects have been brightening this month as both cargo surveyors reported monthly increases of 37 percent and 42 percent respectively in Malaysian exports for the first 15 days of March. Data from the surveyors showed European demand surged in early March, as exports to the region more than doubled from a month ago. Market players are keeping a close watch on official planting forecasts from the US Department of Agriculture due at the end of the month to help gauge soybean output for the year. In other vegetable oil markets, the most active US soyoil contract for May delivery edged down 0.4 percent while the most active September 2012 soyoil contract on China's Dalian Commodity exchange lost 0.1 percent.