SE Asian palm oil prices rangebound, except RI's

SE Asian palm oil prices rangebound, except RI's

By Tan Lee Lee

KUALA LUMPUR (Reuter): Southeast Asian palm oil prices are
expected to be rangebound this week except for the Indonesian
market, which could dip slightly on the back of poor demand,
regional traders said.

"This week's trend is likely to be rangebound unless strong
offtakes from consumers and supportive factors emerge to reverse
sentiment," a trader in Kuala Lumpur said.

Malaysia's benchmark September futures has found technical
support at 1,190 ringgit, but a strong upper resistance at 1,200
will keep the contract rangebound between 1,180 and 1,200
ringgit, dealers predicted.

"The range is 1,180 to 1,200 for now and I don't think it will
break and stand above the 1,200 level," said a Singapore-based
trader.

On Friday, the September contract closed at 1,190 ringgit.

Traders in Singapore said the contract could be kept under the
1,200 ringgit-level by a combination of factors, including
bearish soyoil futures in Chicago, higher domestic production of
palm oil and an overall slowdown in buying interest.

"As long as the contract is trading below the psychological
level of 1,200, we feel that the underlying tone is bearish as
the chart still shows a sell-signal," a technical analyst said.

Forecasts that palm oil stocks were rising, alongside with
production in Malaysia, has also undermined sentiment despite a
pickup in Chinese buying this month.

"China is buying, but the rest of the world isn't," a trader
in Singapore said. "There wasn't enough support for it."

Cargo surveyor Societe Generale de Surveillance (SGS) on
Friday pegged China's palm oil imports from Malaysia from June 1-
20 at 94,300 tons against 43,100 tons for May 1-20.

In Indonesia, traders were bracing for a soft trading week.

"I was expecting the market to rebound this week, but with the
falls in Malaysia on Friday I don't think it will happen," a
trader in Singapore said. "But there will not be any significant
fall."

Traders said processing margins were tight, and would underpin
prices from falling significantly.

"Some players have been putting pressure on prices by selling
at below the market range," another trader said. "But I think
they are running out of steam."

Indonesian palm olein closed last week at 1,370-75 rupiah/kg,
against the 1,385-90 rupiah/kg a week ago.