Palm oil ends lower due to losses in soyoil; weaker Ringgit limits decline
Malaysian palm futures fell for the second consecutive session on Monday, giving up gains made at midday following losses by rival soyoils. However, a weaker Ringgit helped limit losses.
Bursa Derivatives Exchange benchmark contract dropped 1.2% at close to 4,758 Ringgit ($1,069.21). The contract dropped more than 4% in the last week.
Anilkumar bagani, head of commodity research at Mumbai's Sunvin group, said that the prices for crude palm oil futures opened lower but recovered at midday on the back of bargain-buying following the steady performance seen in other oils, notably soyoil, rapeseed and rapeseed.
The weaker Malaysian Ringgit and the strong recovery of rapeseed futures during Asian hours helped to further boost bullish sentiments for palm oil, he added.
The weakening ringgit is also a factor that has boosted palm prices, according to a Kuala Lumpur-based dealer.
The palm ringgit's trade currency, the dollar, fell by 0.07%, making the commodity more affordable for buyers who hold foreign currencies.
Palm oil prices on the Dalian Commodity Exchange rose 0.58% while soyoil prices fell 0.08%. Chicago Board of Trade soyoil fell by 1.57%. Rapeseed futures at the Zhengzhou Commodity Exchange increased by 1.55%.
As they compete to gain a share of the global vegetable oil market, palm oil monitors price changes in rival edible oils.
The Malaysian Palm Oil Board announced last Friday that Malaysian palm oil production will fall for a fourth consecutive month during December due to heavy rains in the second largest producer of tropical oil in the world.
Oil futures have eased off their highest level in weeks, as traders take profit and wait for the Federal Reserve meeting this week to get clues about further rate cuts.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
Malaysian palm oil exports dropped between 6.7% to 9.8%, according to cargo surveyors. ($1 = 4.4500 ringgit)
(source: Reuters)
