Asian palm oil markets seen mixed

Asian palm oil markets seen mixed

KUALA LUMPUR (Reuter): Asian palm oil markets were expected to be mixed this week with bearish technicals seen dampening Malaysian sentiment, while Singapore may recover due to a nearby supply tightness, regional traders said.

In Indonesia, palm prices were expected to trend lower on sustained weak demand, but downside could be limited by the relatively high price of crude palm oil.

"Technically, palm still looks weak as May futures broke the psychological level of 1,250 ringgit last week," a chartist in Kuala Lumpur said.

Malaysia's third month futures contract, which closed on Friday at 1,234 ringgit a ton, was expected to trade at the lower ranges of between 1,200 and 1,250 ringgit this week.

However, Singapore traders were bullish, saying May futures should be trading around 1,230 ringgit a ton. "We will see a test of 1,270 to 1,280 ringgit," said a Singapore dealer for the European trading house.

Tightness in nearby supply could help prices to remain firm, traders said.

"The shortage is still there. Short-term through April, it's still pretty tight," the Singapore trader said.

Another Singapore trader said soyoil's recent gains in the Chicago futures market should also support the firm tone.

"The run-up in soyoil should keep prices in the positive side of the ledger," the trader said.

One dealer said the low prices in the market may also tempt major buyers like India or Pakistan to cover their positions.

"Prices are beginning to look interesting for buyers," the dealer said.