Palm falls, set for fourth day of losses on firmer ringgit

-A +A

KUALA LUMPUR (Feb 27): Malaysian palm oil futures declined in early trade on Wednesday, in line to chart a fourth straight day of losses, weighed by appreciation in the ringgit and weaker related edible oils on China's Dalian Commodity Exchange (DCE).

Gains in the ringgit, palm's currency of trade, usually make the edible oil more expensive for foreign buyers. The ringgit was last up 0.1% against the dollar at 4.0640 and are trading at its strongest levels in about six months.   

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was down 0.4% at RM2,174 (US$534.94) a tonne at the midday break.

It earlier fell to RM2,166, matching the previous session's intraday low which was also its lowest levels since Jan 17.

Earlier in the day, derivatives trading on Bursa Malaysia was halted due to technical issues with CME Globex, its electronic trading platform. It resumed trading at 0330 GMT after the glitches were resolved.

"The trading halt probably reduced trading activities, but the market was down tracking weakness in the DCE and a firm ringgit," said a Kuala Lumpur based trader.

In other related oils, the Chicago March soybean oil contract was last up 0.3%.

The May soyoil contract on the Dalian Commodity Exchange declined 0.2% and the Dalian May palm oil contract was down 0.8%.

Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.   

Palm oil may slide further into a range of RM2,142-2,154 per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

Palm, soy and crude oil prices at 0531 GMT

Contract          Month    Last  Change     Low   High  Volume
MY PALM OIL       MAR9     1970  -12.00    1908   2039     824
MY PALM OIL       APR9     2128   -9.00    2121   2169    9786
MY PALM OIL       MAY9     2174   -9.00    2166   2208   26462
CHINA PALM OLEIN  MAY9     4578  -38.00    4570   4604  213842
CHINA SOYOIL      MAY9     5672  -12.00    5640   5684  185878
CBOT SOY OIL      MAR9    30.18   +0.09   30.12  30.18    2379
INDIA PALM OIL    FEB9   550.40   -0.70  550.20  551.1      48
INDIA SOYOIL      MAR9   759.25   -1.80   758.7    762    2250
NYMEX CRUDE       APR9    56.02   +0.52   55.89  56.07   12024

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 = RM4.0640)
(US$1 = 70.9850 Indian rupees)
(US$1 = 6.6925 Chinese yuan)