Palm oil logs biggest weekly drop in 3 weeks

KUALA LUMPUR: Malaysian palm oil futures edged down on Friday, falling for five out of six sessions as a stronger ringgit dampened buying interest from overseas investors and refiners.
    Anticipation of firm export demand, however, curbed losses
and kept prices locked in a tight trading range of 2,509-2,537
ringgit.         
    The benchmark August contract on the Bursa Malaysia
Derivatives Exchange lost 0.3 percent to close at 2,515 ringgit
($783) per tonne on Friday. Weekly prices dropped 2.5 percent,
their biggest fall in three weeks. 
    Total traded volume stood at 32,141 lots of 25 tonnes, just
below the average 35,000 lots.   
    "Prices came back down again because the ringgit is strong
and palm technicals are uncertain," said a trader with a foreign
commodities brokerage. 
    The ringgit gained 0.7 percent this week on
stronger-than-expected economic data and a wider current account
surplus, making the ringgit-denominated palm feedstock more
expensive for overseas buyers. The currency was trading at
3.2100 per dollar late Friday. 
    Technicals showed signals are mixed for palm oil, as it is
not clear if a rebound from the May 21 low of 2,492 ringgit per
tonne has completed, said Reuters market analyst Wang Tao.
 
     
           
    The Malaysian palm market, which sets the tone for global
prices, slipped off from last week's high of 2,630 ringgit to
fall to a more than four-month low of 2,492 ringgit on
Wednesday, after weak comparative edible oil markets and a firm
ringgit triggered technical selling.  
    Market participants expect exports of palm oil products,
used in a wide range of foodstuff, to be stronger in May and
June as buyers re-stock ahead of a Muslim festival, but say that
weak comparative markets overseas would cap gains.
    "Although exports are good, but overseas markets, especially
the U.S. and China soybean oil markets, are dragging on palm
oil," the Kuala Lumpur-based trader added.
    Weaker prices of rival soybean oil narrows palm's discount
and could channel demand away from the tropical oil. 
    Traders said the Malaysian Palm Oil Association, a group of
growers, estimates that Malaysia's palm output grew 5.1 percent
in the 1-20 May period compared with a month earlier. The No.2
producer churned out 1.56 million tonnes of crude palm oil in
April.
    In other markets, Brent crude oil held above $110 a barrel
on Friday, supported by the crises in Ukraine and Libya as well
as by positive economic data in the world's top two oil
consumers, the United States and China.      
    In other competing vegetable oil markets, the U.S. soyoil
contract for July edged up 0.5 percent in late Asian
trade, while the most active September soybean oil contract
 on the Dalian Commodities Exchange edged up 0.6
percent.   
 
  Palm, soy and crude oil prices at 1022 GMT
                                                                                                                     
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      JUN4    2535   -15.00    2534    2560     665
  MY PALM OIL      JUL4    2523    -8.00    2519    2548    5968
  MY PALM OIL      AUG4    2515    -7.00    2509    2537   16766
  CHINA PALM OLEIN SEP4    5952   +30.00    5916    5980  266346
  CHINA SOYOIL     SEP4    6834   +38.00    6802    6854  258534
  CBOT SOY OIL     JUL4   41.06    +0.20   40.74   41.15    4205
  NYMEX CRUDE      JUL4  103.79    +0.05  103.64  103.93    9885
                                                                                                                     
  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil and RBD palm olein in Chinese yuan per tonne
  Crude in U.S. dollars per barrel
   
 ($1 = 3.2105 Malaysian ringgit)
 ($1 = 6.2365 Chinese yuan)- Reuters