Palm Hits Near 1-Wk Low as Rival Oils Weaken
Category: Oilseeds
(Reuters) – Malaysian palm oil futures fell to their lowest in nearly one week on Monday, in line for a third straight session of losses, tracking losses in related edible oils and as a stronger ringgit weighed.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 0.7
percent to 2,816 ringgit ($673.20) a tonne at the midday break, the first day of a new trading contract. It earlier hit a low of 2,815 ringgit, its weakest since Sept. 12.
Traded volumes stood at 17,478 lots of 25 tonnes each at noon.
“We’re seeing some declines as soyoil was down on Friday and Dalian is also down,” said a Kuala Lumpur-based futures trader, referring to soyoil on the Chicago Board of Trade and China’s Dalian Commodity Exchange.
“The market has already priced in the bullish factors,” he said, referring to the recent gains in palm oil shipments.
Palm oil exports from Malaysia surged over 20 percent in the first half of September from a month ago, led by strong gains in demand from China, Europe and India, cargo surveyor data showed.
The October soybean oil contract on the Chicago Board of Trade saw its sharpest fall in a week on Friday, and was down 0.1 percent on Monday.
The January soybean oil on the Dalian Commodity Exchange fell 1 percent, while the January palm olein contract declined 0.7 percent.
Palm oil prices are impacted by the movements in related edible oils including soy, as they compete for a share in the global vegetable oils market.
The market was also down on a stronger ringgit, and on a correction as it was “technically overbought”, said another trader.
The ringgit, the currency palm oil is traded in, strengthened against the dollar in early trade on Monday, making the tropical oil more expensive for foreign currency holders.
The ringgit was up 0.1 percent at 4.1835 per dollar, its strongest level since November.
Palm oil may retest a resistance at 2,885 ringgit per tonne, a break above which could lead to a gain to the next resistance at 2,908 ringgit, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.
