Malaysian palm oil futures fell for a third straight session on Wednesday to a near one-week low, as a firmer ringgit curbed demand and offset expectations of lower supplies due to wet weather. The February benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange declined 0.3 percent to 2,332 ringgit ($551) per tonne by the close. Earlier in the day, it touched its lowest level since November 26 at 2,317 ringgit.
"It is still range-bound trading at 2,300-2,400 (ringgit)," said a trader based in Kuala Lumpur. "We are now looking at production down sharply in November and December with the monsoon season," he added. "There is going to be a lot of flood destruction... At the same time you've strong demand coming in from China." The ringgit rose to its strongest level against the dollar since November 26 before trading little-changed.
A stronger ringgit normally curbs demand for palm as it makes the edible oil costlier for holders of foreign currencies. Traded palm volume stood at 44,203 lots of 25 tonnes each. Last Wednesday palm prices fell to a near one-month low at 2,260 ringgit, but have since recovered to hit a three-week high this week on expectations that the monsoon season in dominant Southeast Asian producers will hurt output.
Palm oil shipments in November dropped 10 percent from a month earlier, cargo surveyor data released on Monday showed. Palm oil still targets 2,401 ringgit per tonne, as indicated by a Fibonacci projection analysis and a triangle, said Reuters market analyst for commodities and energy technicals Wang Tao. In competing vegetable oil markets, the US December soyoil contract was flat, while the May soybean oil contract on the Dalian Commodity Exchange climbed 0.4 percent.
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