Palm snaps 5-day winning streak as crude, soy fall

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KUALA LUMPUR (Nov 4): Malaysian palm oil futures slipped on Tuesday to snap a five-day winning streak as losses in the soy and crude oil markets dragged, although the weakening ringgit stemmed the fall and kept prices near three month highs.
    
Palm oil, the world's most traded vegetable oil, on Monday rose to the July 14 high of 2,345 ringgit as the Malaysian currency slid to a nine-month low and stoked investor appetite for the ringgit-priced feedstock.
    
Traders said a correction had been anticipated after prices jumped 11 percent from the Oct. 20 low.
    
"The short-term chart is overbought and a corrective fall is much expected," said a trader with a foreign commodities brokerage in Kuala Lumpur. "The pullback in soybean oil after last week's rally and weak crude, together with a technical correction assisted the fall."   
    
"However, the sliding ringgit may cushion the fall," added the trader.
    
The benchmark January contract on the Bursa Malaysia Derivatives Exchange had edged down 1.2 percent to 2,306 ringgit ($693) per tonne by Tuesday's close with prices between 2,293 and 2,308 ringgit.
    
Total traded volume stood at 54,078 lots of 25 tonnes, above the usual 35,000 lots.
   
Technicals showed palm oil is expected to retest a resistance at 2,340 ringgit per tonne, as indicated by its wave pattern and a Fibonacci projection analysis, said Reuters market analyst Wang Tao.
            
The Malaysian ringgit slipped 0.4 percent to 3.3300 per dollar on Tuesday, its weakest since Feb. 11, as offshore funds unloaded the currency amid concerns lower oil prices might hurt its economy.
    
Brent crude oil fell to a more than four-year low near $82 a barrel on Tuesday, after top oil exporter Saudi Arabia cut sales prices to the United States. U.S. light crude was down $2.20 at $76.58 a barrel.
 
Weaker crude prices make palm oil a less attractive option to be used for blending into biodiesel.
    
The U.S. soyoil contract for December shed 1.5percent, while the most active January soybean oil contract on the Dalian Commodities Exchange tumbled 1.7 percent.
 
  Palm, soy and crude oil prices at 1047 GMT
                                                                                                              
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      NOV4    2287   -30.00    2283    2305     115
  MY PALM OIL      DEC4    2313   -26.00    2303    2332    4817
  MY PALM OIL      JAN5    2306   -28.00    2293    2327   28918
  CHINA PALM OLEIN JAN5    5338   -60.00    5314    5422  629582
  CHINA SOYOIL     JAN5    5918  -104.00    5888    5956  306440
  CBOT SOY OIL     DEC4   33.53    +0.00   33.47   34.07   10651
  INDIA PALM OIL   NOV4    0.00    +0.00    0.00    0.00       0
  INDIA SOYOIL     NOV4    0.00    +0.00    0.00    0.00       0
  NYMEX CRUDE      DEC4   76.91    -1.87   75.84   78.41   75277
                                                                                                              
  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
 
($1 = 3.328 Malaysian ringgit)    
($1 = 6.1152 Chinese yuan)
($1 = 61.40 Indian rupee)