Palm oil falls on China growth fears after 3 sessions of gains

KUALA LUMPUR (Sept 2): 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% 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% so far this year. The currency fell about 1% 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 U.S. December soyoil contract both saw losses of around 0.5% each in late Asian trade. Dalian palm oil for January was down nearly 0.9%.

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.

    
  Palm, soy and crude oil prices at 1013 GMT
                                                                   
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      SEP5    1919   -26.00    1917    1927      62
  MY PALM OIL      OCT5    1957   -19.00    1945    1970    4889
  MY PALM OIL      NOV5    1991   -22.00    1981    2003   29509
  CHINA PALM OLEIN JAN6    4252   -38.00    4234    4314  582466
  CHINA SOYOIL     JAN6    5360   -26.00    5320    5392  466724
  CBOT SOY OIL     DEC5   27.42    -3.30   27.27   27.55    8667
  INDIA PALM OIL   SEP5  373.00    -3.30  371.30  374.80    1205
  INDIA SOYOIL     OCT5  571.10    -3.20  570.00  573.50   33580
  NYMEX CRUDE      OCT5   44.35    -1.06   43.86   44.95   50935
                                                                   
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
 
($1 = 4.2160 ringgit)    
($1 = 66.2550 Indian rupees)
($1 = 6.3633 Chinese yuan)

Source :The Edge Markets

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