Palm trades higher as ringgit weakens

Madiha Shakeel September 3, 2019

KUALA LUMPUR: Malaysian palm oil futures traded higher in early trade on Tuesday, supported by a weaker ringgit and strength in China’s Dalian Commodity Exchange, but losses in soyoil on the Chicago Board of Trade (CBOT) capped gains

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was last up 0.5% at 2,244 ringgit ($535.56) per tonne.

The ringgit, palm’s currency of trade, weakened 0.5% against the dollar to 4.2230 on Tuesday morning. A weaker ringgit makes palm oil cheaper for foreign currency holders.

In other related oils, U.S. soyoil futures on the Chicago Board of Trade were last down 0.5%, while the September soyoil contract on the Dalian exchange edged up 0.1%.

The Dalian September palm oil contract rose 0.4%.

FUNDAMENTALS

* Palm oil may test a resistance at 2,254 ringgit per tonne, a break above which could lead to a gain at 2,284 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technical.

* U.S. wheat futures edged lower on Tuesday to linger near a near four-month low, as ample global supplies weighed on prices.

* Oil prices fell on Tuesday, declining for a second day as more signs emerged of the toll from the U.S.-China trade war, with South Korea revising down second-quarter growth due to lower exports.

MARKET NEWS

* Global stocks faced headwinds on Tuesday, stymied by U.S.-China trade frictions while the British pound flirted with 2 1/2-year lows as Prime Minister Boris Johnson indicated he could call an election to block lawmakers’ efforts to avert a no-deal Brexit.

* Wall Street ended the week with a lackluster session on Friday as investors were cautious ahead of a holiday weekend in which a fresh round of U.S. tariffs on Chinese imports were due to be levied.

* Sterling wallowed near a more than two-year low on Tuesday on growing investor worries about a “no-deal Brexit” as rival British lawmakers fought for control over negotiations to leave the European Union.

Copyright Reuters, 2019

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