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)