Malaysian palm oil tumbles

Malaysian palm oil futures saw a third straight session of declines on Friday evening, hitting their lowest in two weeks, as weaker performing rival oils and a stronger ringgit weighed on prices. Benchmark palm oil futures for March delivery on the Bursa Malaysia Derivatives Exchange were down 0.7 percent at 3,075 ringgit ($688) a tonne at the end of the trading day. Earlier in the session, they hit 3,028 ringgit, their weakest since December 23.
Traded volumes stood at 67,914 lots of 25 tonnes each at the close of trade. "The ringgit factor is what's driving the market today," said a futures trader from Kuala Lumpur, while another trader added that weaker performing related oils also dragged palm prices lower. The ringgit, palm's currency of trade, rose 0.3 percent against the dollar to reach 4.4710 in the evening. It earlier touched 4.4700, its strongest levels in three weeks.
The ringgit had witnessed a slide in the past two months on a stronger dollar, making palm oil cheaper for holders of foreign currencies. Palm's movements also track the prices of related edible oils, as they compete for a share in the global vegetable oils market. The March soyabean oil contract on the CBOT fell 0.4 percent, while the May soyabean oil contract on the Dalian Commodity Exchange dropped 1.3 percent.
In other edible oils, the May contract for Dalian palm olein slid 1.7 percent. Slowing palm oil shipments in recent weeks have also weighed on market sentiment. December exports of the tropical oil are seen declining for a third straight month by 3 percent, while output is forecast to drop 8 percent to 1.45 million tonnes, showed a Reuters survey.
End-stocks are expected to fall for the first time in four months by 3.8 percent to 1.32 million tonnes. Official government palm oil data is scheduled to be out on January 10. Palm oil is expected to fall to 3,014 ringgit per tonne, as it has cleared a support at 3,089 ringgit, said Reuters market analyst for commodities and energy technicals Wang Tao.