Palm declines on firm ringgit, weak soyoil

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KUALA LUMPUR (Aug 8): Malaysian palm oil futures fell at the midday break on Wednesday, in line to snap three previous days of gains, on the back of a firmer ringgit and weaker soyoil.

The ringgit, palm's currency of trade, had declined against the dollar to an over-seven-month low on Tuesday, lending support to palm, but was slightly up 0.02% at 4.0730 at noon.

A stronger ringgit usually weighs on palm by making it more expensive for buyers holding foreign currencies.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange fell 0.6% at RM2,222 (US$545.54) a tonne at noon.  

Trading volumes stood at 18,846 lots of 25 tonnes each.

"The ringgit is stronger today, and palm is also down on a correction after it was unable to break yesterday's high," said a futures trader in Kuala Lumpur.

Palm was also down on "current weakness in rival oilseed," another trader added, referring to US soyoil on the Chicago Board of Trade.

Chicago soybeans edged lower on Wednesday, giving up some of the last session's strong gains, but losses were limited by concerns over US crop condition and expectations of China's return to the market.

Palm oil prices are impacted by movements of other edible oils, as they compete for a share in the global vegetable oils market.

The Chicago December soybean oil contract fell 0.2%, while the January soybean oil contract on China's Dalian Commodity Exchange was up 0.3%.

In other related edible oils, the Dalian January palm oil contract edged up 0.7%.

Palm, soy and crude oil prices at 0513 GMT

Contract          Month    Last  Change     Low    High  Volume
MY PALM OIL       AUG8        0   +0.00       0       0      91
MY PALM OIL       SEP8     2202  -12.00    2200    2216     930
MY PALM OIL       OCT8     2222  -13.00    2219    2237    6137
CHINA PALM OLEIN  JAN9     4930  +32.00    4910    4942  169246
CHINA SOYOIL      JAN9     5878  +18.00    5858    5910  196690
CBOT SOY OIL      DEC8    29.03   +0.00      29   29.08     973
INDIA PALM OIL    AUG8   592.80   -0.80  591.60     593      42
INDIA SOYOIL      AUG8    736.9   -0.70   736.5   739.5     900
NYMEX CRUDE       SEP8    69.26   +0.09   69.07   69.32   18755

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US 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 US dollars per barrel

(US$1 = RM4.0730)
(US$1 = 68.6400 Indian rupees)
(US$1 = 6.8216 Chinese yuan)