Malaysian palm oil futures fell on Thursday, partly reversing steep gains in the previous session, as the market tracked the volatile ringgit. The benchmark December palm oil contract on the Bursa Malaysia Derivatives Exchange lost 1.4 percent at the end of the trading day to reach 2,287 ringgit ($555.10) a tonne. It fell to 2,216 ringgit last Friday, its lowest in three weeks, coming off near 15-month highs at 2,444 ringgit hit earlier in the week.
"The market is sharply lower on the ringgit, tracking very closely on this factor despite US soyoil being marginally higher," said a trader based in Kuala Lumpur. Traded volume stood at 44,171 lots of 25 tonnes each, above the average 35,000 lots usually traded in a day. The strengthening ringgit against the dollar overshadowed the slight uptick in soyoil prices and news of a new palm oil producer group being set up by Malaysian and Indonesia to replace "no deforestation" pledges made by major palm companies. The ringgit gained 1.4 percent on Thursday, weighing on palm prices.
The market was also bearish ahead of export data from a cargo surveyor, which reported an 8.8 percent drop in exports from October 1-15 from the same time period a month ago. Palm oil is expected to test a support at 2,274 ringgit per tonne. A break below this level could lead to a loss to the next support at 2,252 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals. In other vegetable oil markets, the US December soyoil contract fell 0.4 percent while the January soybean oil contract on the Dalian Commodity Exchange rose 0.1 percent.
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