Palm hits over 1-week low on stronger ringgit

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KUALA LUMPUR (Aug 27): Malaysian palm oil futures slipped to a more than one-week low on Monday, tracking weakness in related edible oils on China's Dalian Commodity Exchange and as the ringgit strengthened.

The ringgit, palm oil's currency of trade, gained 0.2% against the dollar to 4.0980, making the vegetable oil more expensive for holders of foreign currencies.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was down 0.3% at RM2,213 (US$539.10) a tonne at the midday break, heading for a third session of falls in four. Earlier in the session, it fell to its weakest since Aug 16 at RM2,205.

Trading volumes stood at 8,936 lots of 25 tonnes each at noon.

"The current weakness in Dalian and strength in the local currency are likely to trigger lower palm prices," said a Kuala Lumpur-based trader.

The market is also trading cautiously ahead of an industry conference on Tuesday and Wednesday, which is likely to see leading analysts share their outlooks and price forecasts, said the trader.

Palm oil still targets RM2,192, as it has broken a support at RM2,224 per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

In other related oils, the Chicago December soybean oil contract was down 0.1%, while the January soybean oil contract on China's Dalian Commodity Exchange declined 1.1%.

The Dalian January palm oil contract fell 1.4%.

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

Palm, soy and crude oil prices at 0520 GMT

Contract          Month    Last  Change     Low    High  Volume
MY PALM OIL       SEP8     2175   -3.00    2171    2178      61
MY PALM OIL       OCT8     2195   -3.00    2187    2197     973
MY PALM OIL       NOV8     2213   -6.00    2205    2217    4957
CHINA PALM OLEIN  JAN9     4860  -70.00    4850    4924  297452
CHINA SOYOIL      JAN9     5818  -66.00    5802    5876  383502
CBOT SOY OIL      DEC8        28.46   -0.04   28.33    28.5 3950
INDIA PALM OIL    AUG8   594.00   -1.50  592.70   594.6      27
INDIA SOYOIL      SEP8    731.2   -2.40     730   733.6    1990
NYMEX CRUDE       OCT8    68.75   +0.03   68.50   68.77   19428

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 = 70.0900 Indian rupees)
(US$1 = 6.8740 Chinese yuan)
(US$1 = RM4.1050)