Palm oil hits over 4-month low on stronger ringgit

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KUALA LUMPUR (Dec 5): Malaysian palm oil futures hit a more than four-month low on Tuesday, as the ringgit strengthened, making the tropical oil more expensive for holders of foreign currencies.

The ringgit, palm's currency of trade, rose to its highest since September 2016 against the dollar, and was last up 0.2% at 4.0520.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange was down 1.2% at 2,558 ringgit (US$631.45) a tonne at the midday break, heading for a second straight session of decline.

Earlier in the session, the contract fell as much as 1.3% to 2,554 ringgit, its lowest since July 24.

Traded volumes stood at 17,197 lots of 25 tonnes each at noon.

"The ringgit continues to strengthen," said a futures trader from Kuala Lumpur.

The Malaysian currency has gained over 4% since Nov 1 and 10% so far this year. 

"Expectations about Malaysia's end-November stockpiles are also bearish," said the trader, as weaker exports last month are seen contributing to rising end-stocks. 
 
Production in Malaysia, the world's second largest producer after Indonesia, rose 12.9% in October from a month earlier to hit the 2 million tonne mark, while end-stocks gained 8.4% to 2.2 million tonnes.

In other related oils, the January soybean oil contract on the Chicago Board of Trade was down 0.1%, while the January soybean oil contract on the Dalian Commodity Exchange fell 0.3%.

Meanwhile, China's Dalian January palm olein contract declined 0.5%.

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

Palm oil may fall into a range of 2,519 ringgit to 2,555 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
      
 Palm, soy and crude oil prices at 0505 GMT

Contract Month Last Change Low High Volume
MY PALM OIL DEC7 2450 -30.00 2445 2455 74
MY PALM OIL JAN8 2521 -34.00 2519 2544 1216
MY PALM OIL FEB8 2558 -30.00 2554 2582 8363
CHINA PALM OLEIN MAY8 5424 -48.00 5416 5486 201442
CHINA SOYOIL MAY8 6002 -36.00 5998 6064 219332
CBOT SOY OIL JAN8 33.4 +0.00 33.4 33.54 4164
INDIA PALM OIL DEC7 577.30 -3.20 576.00 579 212
INDIA SOYOIL DEC7 725.7 -1.60 724.6 726 1540
NYMEX CRUDE JAN8 57.58 +0.11 57.40 57.64 13988

 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 = 4.0510 ringgit)
(US$1 = 64.3000 Indian rupees)
(US$1 = 6.6110 Chinese yuan)