Palm dips on overnight soyoil losses

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KUALA LUMPUR (Feb 9): Malaysian palm oil futures slipped on Friday after two consecutive sessions of gains, tracking overnight losses in US soyoil.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was down 0.3% at RM2,488 (US$631.95) a tonne at the midday break. It has gained 0.9% so far this week.

Trading volumes stood at 14,461 lots of 25 tonnes each at Friday noon.

"Palm has been range trading, but is now down tracking overnight weakness in the soyoil market," said a Kuala Lumpur-based trader, adding that the market was awaiting data from cargo surveyors and the Malaysian Palm Oil Board (MPOB).

"MPOB may paint a slight bullish picture," said the trader, as production in January is widely expected to decline on-month, in line with seasonal trend.

Data from cargo surveyors is likely to show a drop in exports in the coming weeks.

A cargo surveyor will report its export figures on Saturday, while MPOB is scheduled to release its data on Monday.

Another trader said weakness in the ringgit, palm's currency of trade, could cap declines in palm prices.

A weaker ringgit typically supports the vegetable oil by making it cheaper for foreign buyers. The Malaysian currency had weakened by 0.3% against the dollar to 3.9270 around Friday noon.

In other related edible oils, the March soybean oil contract on the Chicago Board of Trade was up 0.3% after shedding over 1% on Thursday.

The May soybean oil on the Dalian Commodity Exchange rose 0.3%, while the Dalian May palm oil contract was up 0.4%.     

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 Wang Tao, a Reuters market analyst for commodities and energy technicals.

Palm, soy and crude oil prices as of 0450 GMT

Contract          Month    Last  Change     Low    High  Volume
MY PALM OIL       FEB8        0   +0.00 0 0 0
MY PALM OIL       MAR8     2490   -8.00    2487    2495     135
MY PALM OIL       APR8     2488   -7.00    2484    2495    5065
CHINA PALM OLEIN  MAY8     5130  +20.00    5118    5158  205496
CHINA SOYOIL      MAY8     5634  +18.00    5624    5664  170782
CBOT SOY OIL      MAR8    32.31   +0.10   32.22   32.35    6844
INDIA PALM OIL    FEB8   570.60   -1.80  570.40   571.6      68
INDIA SOYOIL      FEB8    738.6   -1.40   738.6   738.6      10
NYMEX CRUDE       MAR8    60.54   -0.61   60.36   60.67   32235

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 = RM3.9370)
(US$1 = 64.3675 Indian rupees)
(US$1 = 6.3240 Chinese yuan)