KUALA LUMPUR: Malaysian palm oil futures extended declines on Monday, heading for their third straight session of falls, as it weakened in line with overnight losses in soyoil on the Chicago Board of Trade (CBOT).
A stronger ringgit, palm’s currency of trade, also weighed on the tropical oil, said a trader, as this makes the oilseed more expensive for foreign buyers.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was down 0.6 percent at 2,781 ringgit ($664.52) a tonne at the midday break.
Traded volumes stood at 16,195 lots of 25 tonnes each at noon on Monday.
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“Palm is down following the overnight soybean oil market, which is looking at market oversupplies,” said a Kuala Lumpur-based futures trader, referring to CBOT soyoil, which witnessed a third session of declines following a US Department of Agriculture (USDA) crop report released last week.
The USDA had raised its corn crop forecast to 14.578 billion bushels, based on an average yield of 175.4 bushels per acre, which would top a record set last year if realised.
The trader added that the stronger ringgit, which hit its strongest in nearly two months on Monday, also weighed on the market. It was last up 0.1 percent at 4.1850 per dollar, its strongest level since Sept. 20.
Palm oil looks neutral in a range of 2,779-2,808 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
In other related edible oils, the December soybean oil contract on the Chicago Board of Trade dropped as much as 0.4 percent, while the January soybean oil contract on the Dalian Commodity Exchange slipped up to 0.7 percent.
The January palm olein contract slightly dipped as much as 0.2 percent.
Palm oil is impacted by other edible oils as they compete for a share of the global vegetable oils market.
Source: Brecorder.com
