Palm Oil Heads for Third Weekly Drop on Ringgit’s Winning Streak
Category: Oilseeds
(Businessweek) – Palm oil headed for a third weekly drop as the Malaysian currency gained against the dollar, reducing the appeal of ringgit-denominated futures.
The contract for June delivery declined as much as 0.4 percent to 2,343 ringgit ($772) a metric ton on the Bursa Malaysia Derivatives exchange, before ending the morning session little changed at 2,352 ringgit in Kuala Lumpur. The commodity, used in everything from biofuels to candy to noodles, is set to drop 0.3 percent this week.
The ringgit is poised for a fourth weekly gain, its longest winning streak in 14 months, on speculation the ruling coalition will win national elections set for May 5 and continue its economic reforms. The ringgit has climbed 0.7 percent this week to 3.0353 per dollar, according to data compiled by Bloomberg. The last time it advanced for four weeks in a row or more was the period ended Feb. 3, 2012.
“The stronger ringgit could result in poor sales numbers in April and May for refiners and dealers,” said Paramalingam Supramaniam, director at Kuala Lumpur-based brokerage Pelindung Bestari Sdn. “There is hardly any speculative play and fundamentals had taken a dominant role and this explains the lackluster volume and range.”
Exports from Malaysia climbed 3.5 percent to 456,440 tons in the first 10 days of April from the same period in March, Intertek said April 10. Exports gained 5.4 percent to 462,276 tons, said Societe Generale de Surveillance.
Output in Malaysia climbed 2.2 percent to 1.33 million tons in March, exports rose 10 percent to 1.54 million tons, while inventories shrank 11 percent to 2.17 million tons, the steepest monthly drop since January 2011, the palm oil board said April 10.
Soybean oil for July delivery was little changed at 49.97 cents a pound on the Chicago Board of Trade. Soybeans for delivery in July climbed 0.3 percent to $13.72 a bushel.
Refined palm oil for September delivery gained 0.4 percent to 6,316 yuan ($1,020) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month was little changed at 7,846 yuan a ton.
