Palm marginally up as lower output boosts sentiment

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KUALA LUMPUR (June 19): Malaysian palm oil futures were marginally higher in the first-half of trade on Wednesday, and are expected to trade range-bound as lower production continued to prop up sentiment amid poor exports figures from earlier this week.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was 0.15% up at RM2,025 (US$485.15) per tonne at the midday break.

"So far this month, exports figures have been down but the negative sentiment towards that is somewhat evened out with lower production," a Kuala Lumpur-based futures trader said.

Cargo surveyors and an independent inspection company had over Saturday and Monday reported more than 15% falls in exports.

Malaysia's Southern Peninsular Palm Oil Millers Association reported a 26.44% drop in production on Monday.

Another trader said with ringgit strengthening against the dollar, the upside momentum would be limited.

The ringgit was 0.14% stronger against the US dollar after two previous sessions of weakening. Holders of foreign currency could find palm oil less attractive when the ringgit appreciates.

In other related oils, the Chicago July soybean oil contract dropped 0.3%.

The September soyoil contract on the Dalian Commodity Exchange fell 1.1% and the Dalian September palm oil contract was also down 0.3%.

Palm oil prices are affected by movements in related edible oils, with which it competes for global market share.

Palm, soy and crude oil prices at 0455 GMT

Contract          Month    Last  Change     Low    High  Volume
MY PALM OIL       JUL9     2005   +0.00    1998    2016     101
MY PALM OIL       AUG9     2018   +1.00    2001    2027    4376
MY PALM OIL       SEP9     2025   +3.00    2007    2034   10076
CHINA PALM OLEIN  SEP9     4362  -14.00    4344    4374  381488
CHINA SOYOIL      SEP9     5442  -60.00    5428    5506  404596
CBOT SOY OIL      JUL9    28.26   -0.07   28.16   28.42    2929
INDIA PALM OIL    JUN9   515.00   -2.00  513.30   517.2      88
INDIA SOYOIL      JUN9   760.55   -0.65   760.1  760.85     250
NYMEX CRUDE       JUL9    54.03   +0.13   53.90   54.38    4727

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US 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 US dollars per barrel

(US$1 = RM4.1740)
(US$1 = 69.6400 Indian rupees)
(US$1 = 6.9039 Chinese yuan)