Palm oil flat

09 Jun, 2012

Malaysian palm oil futures ended almost flat on Friday, as a firm demand outlook for the edible oil was offset by fears of slowing global growth that could crimp commodity demand. Federal Reserve Chairman Ben Bernanke's testimony to a congressional committee offered little clue on any monetary stimulus policy, overshadowing initial positive market reaction to a Chinese interest cut.
Palm oil had a volatile trading week on macroeconomic concerns triggered by the ongoing European debt crisis, and ended the week down 1.1 percent. "Market sentiment is still uncertain, and the palm market is tracking external factors, such as what happened in Europe and China," said a trader with a foreign commodities brokerage in Malaysia.
Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange lost one ringgit to close at 2,973 ringgit ($934) per tonne. Prices touched a low of 2,925 ringgit on Monday, their lowest since November 2, 2011. Traded volumes stood at 31,567 lots of 25 tonnes each, higher than the usual 25,000 lots. On the technicals front, palm oil will be neutral in a range of 2,925-3,038 ringgit per tonne, said Reuters market analyst Wang Tao. Palm oil prices are expected to be supported by healthy demand for the tropical oil as Muslims prepare to observe a month of fasting starting in mid-July. Traders will be looking for clues to demand trends as cargo surveyors release June 1-10 export data on Monday.
Industry regulator the Malaysian Palm Oil Board (MPOB) will issue official stocks and output data, also on Monday. The market has shifted its focus to external macroeconomic uncertainty that could hurt palm oil demand. The tropical oil may fall to 2,450 ringgit per tonne, said leading analyst James Fry on Friday. Palm oil could fall to 2,700-2,800 ringgit with the euro debt crisis clouding economic outlook and crimping commodity demand, top oils analyst Dorab Mistry said. In other vegetable oil markets, US soyoil for July delivery lost 1.5 percent in Asian trade while the most active January 2013 soyoil contract on the Dalian commodity exchange ended almost flat.

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