KUALA LUMPUR: Malaysian palm oil futures dropped on Thursday due to market corrections and a strengthening ringgit.
The benchmark December palm oil contract on the Bursa Malaysia Derivatives Exchange closed 2.9 percent lower on Thursday at 2,128 ringgit ($500.71) a tonne, after seeing consecutive rises in the last two weeks.
Traded volume stood at 66,318 lots of 25 tonnes each, well above the average 35,000 lots usually traded in a day.
The ringgit gaining against the dollar is the main factor for the downtrend, said a trader based in Kuala Lumpur, but traders are also taking profit after the market went up in the last ten days.
"It was a bit of an expected correction as the market run up was too fast," he said. "Prices should find support again at 2,100 ringgit."
The ringgit strengthened against the dollar on Thursday by 0.7
percent, reaching 4.2500 per dollar on Thursday. It is emerging Asia's
worst performing currency, having lost about 18 percent so far this
year. A weaker ringgit usually lends some support to palm prices.
Palm oil may drop to 2,068 ringgit per tonne as it has broken a
support at 2,132 ringgit, said Reuters market analyst Wang Tao.
In other vegetable oil markets, the most active January soybean
oil contract on the Dalian Commodity Exchange was down 0.15
percent, while the U.S. December soyoil contract lost 0.9
percent.
Oil prices fell below $50 a barrel on Thursday on weak Japanese
data, drawing concerns on global growth prospects and outweighing the
impact of declining U.S. crude oil stocks.
Palm oil often takes price direction from crude oil, as vegetable
oils are increasingly used in making renewable fuels.
Palm, soy and crude oil prices at 1016 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT5 2055 -52.00 2050 2095 385
MY PALM OIL NOV5 2095 -53.00 2091 2135 16040
MY PALM OIL DEC5 2128 -64.00 2125 2178 32158
CHINA PALM OLEIN JAN6 4276 -8.00 4270 4328 1018844
CHINA SOYOIL JAN6 5384 -8.00 5382 5430 527706
CBOT SOY OIL DEC5 26.64 +0.00 26.60 26.91 5658
INDIA PALM OIL SEP5 0.00 +0.00 0.00 0.00 0
INDIA SOYOIL OCT5 0.00 +0.00 0.00 0.00 0
NYMEX CRUDE OCT5 46.51 -0.64 46.33 47.57 32931
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 4.2500 ringgit)
($1 = 66.1500 Indian rupees)
($1 = 6.3645 Chinese yuan)
- Reuters
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
