Palm declines on overnight US soyoil losses, slow demand

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KUALA LUMPUR (Feb 8): Malaysian palm oil futures fell in early trade on Thursday, coming off a one-week high hit in the previous session, tracking overnight losses in related edible oils and as demand remained weak.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was down 0.4% to RM2,476 (US$630.99) a tonne at the midday break.

Trading volumes stood at 15,137 lots of 25 tonnes each.

"Palm is down today on poor demand and the weak external market," said a trader in Kuala Lumpur, referring to overnight losses in soyoil on the US Chicago Board of Trade.

"These two weeks will be quiet in terms of buying," the trader added.

Malaysian palm oil shipments are forecast to decline 8% in January to 1.31 million tonnes, according to a Reuters poll.

Export data from a cargo surveyor for the Feb. 1-10 period is scheduled for release on Saturday.

The current depreciation in the ringgit could, however, lend support to palm and limit selling, another trader said.

A weaker ringgit, palm's currency of trade, supports the vegetable oil by making it cheaper for foreign buyers. It eased 0.4% against the dollar to 3.9230 around noon on Thursday.  

In other related edible oils, the March soybean oil contract on the Chicago Board of Trade declined 1.8% on Wednesday, in line with soybean futures which fell as traders squared positions ahead of a monthly report due Thursday from the US Department of Agriculture.

It was last up 0.2%.

The May soybean oil on the Dalian Commodity Exchange was down 0.4% while the Dalian May palm oil contract fell 0.2%.     

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

Palm oil looks neutral in a narrow range of RM2,481-2,520 per tonne, according to said Wang Tao, a Reuters market analyst for commodities and energy technicals.

Palm, soy and crude oil prices as of 0502 GMT

Contract          Month    Last  Change     Low    High  Volume
MY PALM OIL       FEB8     2474   -8.00    2474    2474       5
MY PALM OIL       MAR8     2475  -11.00    2471    2496     809
MY PALM OIL       APR8     2476   -9.00    2470    2497    7593
CHINA PALM OLEIN  MAY8     5108  -10.00    5062    5122  191518
CHINA SOYOIL      MAY8     5612  -24.00    5566    5638  196798
CBOT SOY OIL      MAR8     32.6   +0.04   32.59   32.71    3905
INDIA PALM OIL    FEB8   570.40   -0.90  569.50   570.8      63
INDIA SOYOIL      FEB8    738.5   -1.85   737.8  738.85     910
NYMEX CRUDE       MAR8    61.49   -0.30   61.33   61.76   49970

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 = RM3.9240)
(US$1 = 64.2725 Indian rupees)
(US$1 = 6.3287 Chinese yuan)