Palm oil drops on stronger ringgit, weaker soyaoil

Malaysian palm oil futures fell on Friday for a second straight session, weighed down by a stronger ringgit and weaker soyaoil prices. The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was down 0.4 percent at 2,797 ringgit ($667.54) a tonne at the close of trade.
It has shed 0.3 percent this week in a second straight weekly decline. Traded volumes stood at 46,612 lots of 25 tonnes each on Friday evening. "Today's market decline is in line with the external market, following the US Department of Agriculture (USDA) crop report," said a futures trader from Kuala Lumpur.
The USDA raised its corn crop forecast to 14.578 billion bushels, based on an average yield of 175.4 bushels per acre (bpa), which, if realised, would top a record set last year. The December soyabean oil contract on the Chicago Board of Trade fell 0.4 percent after the USDA crop report showed unexpectedly high corn yields. In other related oils, the January soyabean oil contract on the Dalian Commodity Exchange was down 1.1 percent, while the January palm olein contract dropped 1.4 percent.
Palm oil is impacted by other edible oils as they compete for a share of the global vegetable oils market. The continued appreciation of the ringgit also dragged down palm oil, said another trader. A stronger ringgit makes the edible oil more expensive for foreign currency holders. The ringgit, palm's currency of trade, rose to its strongest against the dollar in nearly two months and was up 0.4 percent at 4.1900 per dollar on Friday evening.