Palm falls 1% on weakness in US soyoil, profit booking

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KUALA LUMPUR (Dec 21): Malaysian palm oil futures fell as much as 1% in the first half of trade on Friday, in line for a second day of losses, weighed down by weaker overnight soyoil on the US Chicago Board of Trade (CBOT) and profit booking.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was down 0.8% at RM2,168 (US$519.03) a tonne at the midday break, after falling as much as 1% to RM2,164 earlier in the session.

Palm had traded at an eight week high earlier this week, and is up 4.8% for the week so far.

Trading volumes stood at 9,877 lots of 25 tonnes each at the midday break.

"The palm market is coming off today on some profit taking, and is also influenced by overnight soyoil," said a Singapore-based trader referring to CBOT soyoil.

Palm oil prices have been impacted by changes in soyoil prices in recent sessions, as they compete for a share in the global vegetable oil market.

The Chicago January soybean oil contract had declined 0.9% on Thursday, and was last up 0.3% on Friday.

US soybean futures had hit three-week lows on Thursday, as improving crop prospects in South America overshadowed renewed Chinese demand for US shipments.

Chinese importers are planning to make a third round of US soybean purchases within days after a trade war truce between Washington and Beijing this month triggered China's largest US soy purchases in six months.

Meanwhile, the January soybean oil contract on the Dalian Commodity Exchange fell 0.8% and the Dalian January palm oil contract dropped 1%.

Palm oil may fall into a range of RM2,121-2,150 per tonne, said Reuters market analyst for commodities and energy technicals Wang Tao.

Palm, soy and crude oil prices at 0511 GMT:

Contract          Month    Last  Change     Low   High  Volume
MY PALM OIL       JAN9     2115  -18.00    2112   2115     140
MY PALM OIL       FEB9     2142  -23.00    2137   2164    1074
MY PALM OIL       MAR9     2168  -17.00    2164   2184    5436
CHINA PALM OLEIN  JAN9     4188  -44.00    4172   4246   19486
CHINA SOYOIL      JAN9     5056  -42.00    5056   5128   28712
CBOT SOY OIL      JAN9    28.27   +0.07   28.19  28.28    1250
INDIA PALM OIL    DEC8   512.10   -2.60  512.10  514.5      36
INDIA SOYOIL      JAN9      726   -2.65     726  729.4    1670
NYMEX CRUDE       FEB9    46.28   +0.40   46.14  46.77   32295

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 = RM4.1770)
(US$1 = 69.8380 Indian rupees)
(US$1 = 6.8884 Chinese yuan)