Wednesday, 02 September 2015 17:12
KUALA LUMPUR: Malaysian palm oil futures ended lower on Wednesday after three consecutive sessions of strong gains, as a drop in commodity markets amid concerns over China’s growth weighed on prices.
The benchmark palm oil contract for November on the Bursa Malaysia Derivatives exchange closed 1.09 percent lower at 1,991 ringgit ($ 472.25) a tonne, after trading in a range of 1,981 to 2,003 ringgit.
Traded volume stood at 53,529 lots of 25 tonnes each, above the usual daily average of 35,000 lots.
“Heavy overnight plunges in crude and soybean oil futures snapped Bursa Malaysia Derivatives crude palm oil futures,” said a local trader based in Kuala Lumpur.
“Lingering weakness in the local currency may provide temporary support.”
The Malaysian ringgit has been emerging Asia’s weakest performing currency, losing around 20 percent so far this year. The currency fell about 1 percent at 4.21 per dollar on Wednesday.
On the technical front, Wang Tao, a Reuters market analyst for commodities and energy technicals, said palm oil may fall to 1,963 ringgit per tonne, as it failed to break a resistance at 2,024 ringgit.
In comparative vegetable oil markets, the January soybean oil contract on the Dalian Commodity Exchange and the US December soyoil contract both saw losses of around 0.5 percent each in late Asian trade. Dalian palm oil for January was down nearly 0.9 percent.
Oil prices fell on Wednesday amid worries over an oversupply of crude oil that could last longer than expected.
Palm oil often takes price direction from crude oil due to the increasing use of vegetable oils in making renewable fuels.
