Palm retreats from 6-week high on softer bean oil prices

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KUALA LUMPUR (April 8): Malaysian palm oil futures retreated from a six-week top on Monday, poised to snap five sessions of gains, tracking weaker soybean oil prices on the US Chicago Board of Trade and on a technical correction.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was down 0.3% at RM2,217 (US$540.73) a tonne at the midday break.

In the previous session, palm climbed to RM2,235, its highest since Feb 25.

"The market is lower on a technical correction as it was earlier overbought, but a weak ringgit capped losses," said a Kuala Lumpur-based futures trader.

The market is, however, bullish in the medium-term ahead of official data release from the Malaysian Palm Oil Board, which is forecast to show a decline in March-end stocks, the trader added.

Malaysia's palm oil stockpiles in March are likely to have dropped by 6.4% from February to 2.85 million tonnes, its lowest in five months, according to a Reuters survey, as a hefty jump in exports outpaced production gains.

The Malaysian Palm Oil Board is scheduled to release March data on Wednesday.

A weaker ringgit, palm's traded currency, usually supports the edible oil by making it cheaper for foreign buyers. The ringgit weakened 0.2% against the dollar at 4.0955 around noon on Monday.

In other related oils, Chicago May soybean oil contract was down 0.2%, and the May soyoil contract on the Dalian Commodity Exchange slightly rose 0.1%.

Meanwhile, the Dalian May palm oil contract gained 0.8%.

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

Palm, soy and crude oil prices at 0511 GMT

Contract          Month    Last  Change     Low    High  Volume
MY PALM OIL       APR9        0   +0.00   0 0 0
MY PALM OIL       MAY9     2195   -7.00    2193    2203     225
MY PALM OIL       JUN9     2217   -7.00    2212    2225    5269
CHINA PALM OLEIN  MAY9     4468  +36.00    4464    4516  124850
CHINA SOYOIL      MAY9     5442   +4.00    5440    5474   43186
CBOT SOY OIL      MAY9    29.09   -0.06   29.06   29.15    2826
INDIA PALM OIL    APR9   552.00   +3.70  548.60   554.8     392
INDIA SOYOIL      APR9    748.8   +3.90   743.5   748.9    2530
NYMEX CRUDE       MAY9    63.38   +0.30   63.29   63.49   33460

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 = RM4.1000)
(US$1 = 6.7184 Chinese yuan)
(US$1 = 69.4850 Indian rupees)