Palm hits lowest in nearly two weeks low on weaker related oils

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KUALA LUMPUR (Jan 12): Malaysian palm oil futures fell by more than 1% on Friday evening, extending a sharp decline from the previous session to hit their lowest in nearly two weeks, tracking weakness in related edible oils as the ringgit strengthened.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was down 1.2% at 2,536 ringgit (US$638.79) a tonne at the end of the trading day for a second daily decline. 

Earlier in the session, it fell to the weakest since Jan 2 at 2,525 ringgit. 

For the week, palm was down 2.2%, its first weekly decline in three.

Trading volumes stood at 46,226 lots of 25 tonnes each at the close of trade.

"Palm is down on soyoil and Dalian palm olien. It is also technically following through the selling from yesterday's weak closing," one Kuala Lumpur-based trader said. 

Palm dropped more than 2% the previous day on gains in the ringgit, the tropical oil's currency of trade. 

The ringgit has strengthened 11.5% against the dollar since the start of 2017 and was up 0.4% at 3.9700 on Friday evening.

A stronger ringgit usually makes palm oil more expensive for foreign buyers.  

In related edible oils, the March soybean oil contract on the Chicago Board of Trade declined 0.9% in overnight trade and was last down 0.1% on Friday.

The May soybean oil contract on the Dalian Commodity Exchange fell 0.9%, while the Dalian January palm oil contract was down 1.4%. 

Palm oil tracks the performance of other edible oils that compete for a share in the global vegetable oils market.

Palm oil could break a support at 2,555 ringgit a tonne and fall to the next support at 2,519 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

 Palm, soy and crude oil prices as of 1046 GMT

Contract Month Last Change Low High Volume
MY PALM OIL JAN8 2510 -35.00 2510 2530 76
MY PALM OIL FEB8 2538 -35.00 2515 2546 1261
MY PALM OIL MAR8 2545 -31.00 2528 2558 18536
CHINA PALM OLEIN MAY8 5262 -74.00 5250 5318 297810
CHINA SOYOIL MAY8 5738 -50.00 5722 5794 311992
CBOT SOY OIL MAR8 33.12 +0.00 33.08 33.21 4326
INDIA PALM OIL JAN8 558.00 -1.50 554.50 559.1 577
INDIA SOYOIL JAN8 741 -0.85 740 742.5 1330
NYMEX CRUDE FEB8 63.55 -0.25 63.17 63.72 114441

 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
 
(US$1 = 3.9700 ringgit)
(US$1 = 63.5050 Indian rupees)
(US$1 = 6.4810 Chinese yuan)