Palm rebounds on stronger US soyoil; set for weekly gain

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KUALA LUMPUR (July 19): Malaysian palm oil futures rebounded from early losses to trade flat at the midday break on Friday, supported by overnight gains in soyoil on the Chicago Board of Trade (CBOT).

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange traded flat at RM1,983 (US$482.72) per tonne, after dropping as much as 0.5% earlier in the session.

The market, however, is poised to end the week firmer, up 2% so far this week.

Palm oil still targets RM2,001, as suggested by a projection analysis, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

"The market is still tracking external markets," said a Kuala Lumpur-based futures trader, referring to CBOT soyoil prices, which recovered from losses in the previous session.

US soyoil futures on the CBOT dipped 0.2% on Thursday, but have since gained and was up 0.4%, as of 0507 GMT.

Soybean prices had declined earlier this week on forecasts for cooler weather and export data showing China had cancelled soy purchases for the first time since April.

In other related oils, the September soyoil contract on the Dalian exchange fell 0.2%, and the Dalian September palm oil contract also dipped 0.2%.

Palm oil prices are affected by movements in related oils that compete for a share of the global vegetable oils market.