Palm slips on weaker overnight U.S. soyoil, stronger ringgit

Madiha Shakeel September 6, 2019

KUALA LUMPUR: Malaysian palm oil futures were down at the midday break on Friday, pressured by weakness in overnight soyoil on the U.S. Chicago Board of Trade (CBOT) and a stronger ringgit, its currency of trade.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was last down 0.2% at 2,177 ringgit per tonne at noon break, in line to chart a third day of losses in four.

The contract is down 2.5% so far for the week, on track for a second week of decline.

Palm oil may bounce moderately to 2,219 ringgit before retesting a support at 2,161 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

“Overnight weakness in soybean oil may weigh in and pressure palm prices, while strength in the local currency could cap palm oil’s recovery attempt,” said a Kuala Lumpur-based trader.

A stronger ringgit usually makes the edible oil more expensive for holders of foreign currencies. It strengthened 0.3% against the dollar to 4.1750 on Friday afternoon.

In other related oils, U.S. soyoil futures on the CBOT fell 1.3% on Thursday, but was last up 0.1%. U.S. soybean futures fell more than 1% on Thursday on concerns about burdensome supplies and weak export demand as the U.S.-China trade war drags on, analysts said.

Meanwhile, the September soyoil contract on the Dalian exchange was up 0.3% and the Dalian January palm oil contract fell 0.3%.

Copyright Reuters, 2019

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