KUALA LUMPUR (Aug 3): Malaysian palm oil futures were rangebound on Friday, as weakness in related edible oils and U.S.-China trade friction concerns dented sentiment, but prices edged higher at the end of the trading day.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 0.2% at 2,196 ringgit (US$538.24) a tonne at the close of trade. The market gained 0.5% for the week.
Trading volume stood at 28,412 lots of 25 tonnes each on Friday evening.
"The market is bearish on overnight weakness in rival oilseeds and the current drop in China palm olein on escalating trade tensions between the United States and China," said a futures trader from Kuala Lumpur.
"A lack of positive market-moving news, however, is likely to cap palm's upside."
China said on Thursday that it would retaliate if the United States acted on a threat to raise tariffs on the Asian nation's exports, fuelling fears in markets that the trade war between the world's two biggest economies would escalate.
U.S. President Donald Trump had earlier instructed trade officials to look at increasing tariffs to 25%, from 10% on US$200 billion of Chinese imports.
The Chicago December soybean oil contract ended 1.2% lower on Thursday, in line with the oilseed's losses over the U.S.-China trade concerns, but was last seen 0.03% firmer.
Meanwhile, the September soybean oil contract on China's Dalian Commodity Exchange fell 0.5% and the Dalian September palm oil contract slid 0.8%.
Palm oil prices are influenced by the performance of other edible oils, as they compete for a share in the global vegetable oils market.
Palm oil is expected to drop to 2,149 ringgit per tonne, following its failure to break a resistance at 2,218 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Palm, soy and crude oil prices at 1040 GMT
|MY PALM OIL||AUG8||2170||+24.00||2170||2170||1|
|MY PALM OIL||SEP8||2178||+8.00||2158||2178||2532|
|MY PALM OIL||OCT8||2197||+5.00||2179||2198||15607|
|CHINA PALM OLEIN||JAN9||4870||-44.00||4852||4918||247720|
|CBOT SOY OIL||DEC8||28.62||+0.00||28.5||28.7||5304|
|INDIA PALM OIL||AUG8||587.20||-1.70||586.00||593||997|
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
(US$1 = 4.0800 ringgit)
(US$1 = 68.7850 Indian rupees)
(US$1 = 6.8619 Chinese yuan)