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